Brief Case: Flash Memory, Inc.
Presentation: By teams of 6
Format: Teams will present a written report and deliver a verbal presentation supported by PowerPoint. Time: Initial introduction October 19
Working groups October 24-November 2
In Class ReviewNovember 7
In Class PresentationNovember 9 Each presentation will be not longer than 15 minutes. Discussion questions to be completed in writing showing all calculations, assumptions, and support for conclusions in the form of exhibits: 1. Assuming the company does not invest in the new product line, prepare forecasted income statements and balance sheets at year-end 2010, 2011, and 2012. Based on these forecasts, estimate Flash’s required external financing: in this case all required external financing takes the form of additional notes payable from its commercial bank, for the same period. 2. Assuming the company does invest in the new product line, prepare forecasted income statements and balance sheets at year-end 2010, 2011, and 2012. Based on these forecasts, estimate Flash’s required external financing which could come from other suggested sources. Is there sufficient financing available in the existing loan agreement? Can the company take on more debt financing? How attractive is the proposal to move its bank financing to the factoring division? What is the impact of a private sale of new common stock? 3. What course of action do you recommend regarding the proposed investment in the new product line? Should the company accept or reject this investment opportunity? 4. How does your recommendation from questions 2 and 3 (above) impact your estimate of the company’s forecasted income statements and balance sheets, and required external financing if the company relies solely on additional notes payable from its commercial bank, compared to a sale of new equity? 5. As CFO Hathaway Browne, what financing alternative would you...