liability of the shareholders. However‚ under certain circumstances the corporate entity may be disregarded. This is also known as piercing the corporate veil and is the most frequent method for holding the shareholders liable for the acts of a corporation. Corporate officers‚ directors and controlling shareholders have a general fiduciary duty of loyalty and care which should govern all their corporate conduct. Unless they breach that duty by gross negligence or acts in bad faith‚ they usually will
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ABC Chemical Company Goes Global* Driven by competitive pressures‚ and the attractiveness of the industry’s fastest growing market in the world‚ a U.S.-based chemical manufacturer‚ ABC Chemical Company (name changed to maintain confidentiality) considered expansion into Asia‚ specifically‚ China. William Smith is the International Marketing manager for ABC Chemical Company. William has been tasked with expanding ABC’s manufacturing and distribution to the Asia Pacific region. Many changes in
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regarded QUESTION 2 a) What is the time value of money? flows? b) What factors need to be taken into account when choosing an appropriate discount rate? c) What do you understand by the terms (i) “net present value” (NPV) and (ii) “internal rate of return” (IRR)? d) Compare and contrast the NPV and IRR. Why is it important to “discount” future cash CONTENTS PART ONE: QUESTION 1 1. INTRODUCTION . 2. RISK 2.1 2.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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MODULE M6 Financial Management of Corporate Projects and Programmes Case: TARGET CORPORATION 1. Executive Summary Target corporation has a growth strategy of opening 100 new stores per year. Doug Scovanner‚ the CFO of Target Corporation is preparing for the November meeting of the Capital Expenditure Committee (CEC). He is one of the executive officers who are members of the CEC. With the fiscal year’s
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The average American eats about 1‚996.3 pounds of food per year (Credit Loan). Just what exactly is it that they are eating? Between additives‚ pesticides that are sprayed onto fruits and vegetables‚ hormones that are given to cows‚ and the amount of pollution in water‚ the foods that people eat everyday may not be as safe as some would think. Even simple drinking water has been contaminated by illicit drugs‚ medicinal drugs‚ and hormones (National Geographic). Additives also cause a concern when
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McGilla Golf Company NPV analysis- McGilla Golf Company is thinking about undertaking a new project to add a line of golf clubs to add to their product line. Based on market research their net income will increase by 3‚240‚000 per year for seven years. When analyzing their required net working capital‚ capital spending and operating cash flow over these 7 years‚ their NPV is positive at $6‚480‚747.29. Based on these projections adding the line of gold clubs is an acceptable project for the company
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Business Ethics The Corporation ‘The Corporation’ had a specific aim to portray the problems of not just one corporation‚ but corporations as a whole‚ as is evident from the beginning of the film as a multitude of big business logos flashed across the screen. The film proceeded to highlight the issues surrounding: globalization and consumerism‚ environmental pollution and disregard for the planet‚ unethical marketing‚ and dishonest media. Personally‚ I feel that I’m quite open-minded when it comes
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costs. Thus to make shareholders happy‚ a firm must invest in projects with positive NPVs. We shall start this essay with an explanation of the NPV‚ then compare this method with other investment appraisal methods and finally try to define‚ based on the works of Tony Davies‚ Brian Pain‚ and Brealey/Myers/Allen‚ which method works best in order to define a good investments. So what is the Net Present Value? The NPV is today’s value of the difference between cash inflows and outflows projected at future
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EUROLAND FOODS S.A. Teaching Note Synopsis and Objectives Suggestions for complementary cases on measures of investment analysis: “The Investment Detective” (Case 17); corporate resource allocation: “Victoria Chemicals (A) and (B)” (Cases 22 and 23); “Target Corporation” (Case 19). In January 2001‚ the senior management committee of this company has to decide which major projects should be funded for implementation by the company starting in 2001. The board of directors has arbitrarily
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rest of our life. In this case‚ NPV is the most appropriate answer out of two or three most widely used techniques in capital decision making. While doing so we also should keep in mind two major features of NPV: 1) in monetary terms‚ NPV is the difference between today’s market value of the investment and its original cost. 2) a financial manager should always act on behalf of the interests of shareholders through distinguishing and picking up projects with positive NPV‚ since it’s very clear that the
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