Solution maf420 Question 1 a) Kettle : 3000 unit per month : 1‚500 kg of Material L Rice cooker : 1000 unit per month : 1‚500 kg of Material L So‚ the ratio is 1:3. If the company wishes to fulfill all the targeted kettle produce‚ therefore they should use all the material available to produce rice cooker for produce that component. From here‚ we can conclude that‚ the company need to scarified 1000 unit of rice cooker to produce 3000 unit of kettle. The total contribution lost is….
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note that describes how to apply the Discounted Cash Flow method of Company Valuation in companies undergoing corporate restructuring. The concept is based on the change in shareholders wealth as a direct result of the change in the firm’s value- which depends on multiple factors including corporate restructuring. The note describes in details about the technical aspects of the DCF method. First it defines the DCF as a sum of the PV of all expected future cash flows and how every method identifies two
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incestment creates wealth if the discounted value of the future cash flow exceeds the up front cost. The problem is what to discount- stick to these rules: 1. Only cash flow is relevant. Net present value depends on future cash flows it’s the difference between cash received and cash paid out. Cash should be recorded only when they occur and not when work is undertaken or a liability is incurred. Ex: taxes should be discounted from their actual payment date. 2. Estimate cash flows on an incremental basis
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Genzyme Case Study: Table of Contents Problem Identification......................................................................................................3 Alternative Solutions.........................................................................................................4 Recommendations.............................................................................................................5
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resource allocation to an SBU or product (Drummond & Ensor 2004). ➢ What is more‚ the model rests on net cash consumption or generation as the fundamental portfolio balancing criterion. That is appropriate only in a capital constrained environment. In modern economies‚ with relatively frictionless capital flows‚ this is not the appropriate metric to apply – rather‚ risk-adjusted discounted cash flows should be used (ManyWorlds 2005). ➢ Also‚ the matrix assumes products/business units are independent
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Analyses “Ocean Carriers” Objectives of case: The key objective is to develop an understanding of how discounted cash flow analysis can be used to make investment and corporate policy decisions. 1. Determine the value and net present value of a real assets; 2. Distinguishing between book value and market value; 3. Identifying and forecasting incremental expected cash flows‚ including initial and ongoing capital expenditures‚ investment in net working capital‚ and proceeds from asset
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the Capital Cash Flow method. The Capital Cash Flow method‚ when applied appropriately‚ should yield the same valuation when discounting a company’s Free Cash Flow. To get Capital Cash Flows (CCF)‚ Net Income is adjusted by adding back non-cash expenses and other reconciliations to form cash flow‚ decreasing Capital Expenditures‚ decreasing changes in Net Working Capital and finally‚ adding Cash Interest. The Capital Cash Flow Method is algebraically equivalent to the Free Cash Flow Method because
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FAMILY NAME: ______________________________________ OTHER NAME(S): ______________________________________ STUDENT ID: ______________________________________ SIGNATURE: ______________________________________ PAPER ID: 00615 THE UNIVERSITY OF NEW SOUTH WALES AUSTRALIAN SCHOOL OF BUSINESS SCHOOL OF BANKING AND FINANCE FINS1613: BUSINESS FINANCE SEMESTER 1 2012 FINAL EXAM 1. TIME ALLOWED – 3 hours 2. THIS EXAMINATION PAPER HAS 19 PAGES 3. TOTAL NUMBER OF QUESTIONS – 45 Multiple Choice
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will solely be the present value of cash flow subtracts the cost of the project. In numerical term‚ the asking price of HK$ 1 billion dollar has a present value of HK$ 1.54 with a cost of HK$ 1.6 billion. This leads to a net present value of HK$ (60 million) dollar. This makes the project very unattractive. Therefore‚ different approach is used to examine whether or not the project is profitable. Weighted average cost of capital is used in the discounted cash flow method that shows the case of Citic
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Corporate Finance 1. Finance point of view: Corporation: a money processing machine? * Product markets: everything what corporates make (lead with customers‚ suppliers‚ labor) * Capital markets: generic term for the entities which supply cash to this money processing machine‚ and the processing machine uses the money to do things and then periodic sends money back to the capital market there are inflows from the capital markets to the corporations and the money comes back out from to the
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