Studend ID- 125817230
Total pages- 6 Currie Road Construction Limited
Currie Road Construction Ltd should enter the US market (Houston, Texas) by setting up a wholly owned subsidiary, and will be involved in road maintenance. While Currie can make the most of the $880 million stimulus that the BC government is considering, by expanding into the Texan market, it will be able to earn additional cash flows over and above the ones earned from BC operations. Currie is projected to earn more revenues from road maintenance $1751.24 as opposed to road construction, which is projected to yield $ 832.65.
Currie …show more content…
Though this means that there will a substantial resource commitment, Currie will be able to finance to this expansion by taking a loan from the bank, by keeping as collateral its valuable pieces of real estate (eg, two golf courses) whose potential value is enormous. Since the Texan market has low entry barriers (refer to Exhibit 4), it will not be difficult to set shop there.
Though the company is still clearing its outstanding debt, Currie is optimistic that they are headed in the right direction. With this new venture, we are assuming that since the TxDOT is has expressed enthusiasm in Currie entering the market, we would be able to gain some subsidies from the government in setting up the wholly owned subsidiary and revenues earned from the new venture, would be able to cover the interest expense on the new loan. We could have sold some of our property to finance the wholly owned subsidiary, but due to recession, it would be tough to find the right buyer and a right …show more content…
Total revenues are the addition of last year’s revenues $81842 + projected revenue of $2376. The total infrastructure projects scheduled to for bidding in Texas during April 2009 were segregated into Maintain and Build projects. Total of Maintain were calculated to be $ 87561884 and total of Build were calculated to be $