I am pleased to share my concerns, analysis and recommendation about the Merseyside Project with you. Your DCF analysis is excellent and helpful. However, I have to make some changes to it. The memo will be divided into 6 parts.…
In order to find out what the minimum monthly payment would be we would have to…
At June 30, May and June have been paid. There are 4 months of rent remaining…
The question of possible future layoffs decision should not form part of the decision making process. The business has a responsibility to its stakeholders to maximise returns and to improve its overall competitiveness and sustainability.…
The fixed coverage charge ratio measures the payments with the leases and refers to the…
Therefore, the implicit interest rate in the lease is approximately i = 4% per year.…
Victoria Chemicals is one of the leading producers of Polypropelene, a polymer that is used in many products ranging from carpet fibers, automobile automobile components, packaging film and more. When Victoria Chemicals started up in 1967 they built two plants, one in Merseyside, England and one in Rotterdam, Holland. Both plants were identical to each other and produced an equal amount of goods. Morris Greystock, the controller of the Merseyside plant had notice a decline in stock price in from 250 pence per share in 2006 to 180 pence per share in 2007 and knew he had to do something. Facing pressure from the investors and wanting to increase production efficiency, he decided to renovate the Merseyside plant so Victoria Chemicals can lift itself back to where it once was and continue to be one of the major competitor’s in the worldwide chemical industry. After taking all the costs and benefits into consideration, Greystock put together his own analysis in which he based it on four difference components; Earning per Share, Payback Period, Net Present Value, and Internal rate of return. Soon after many people looked at his analysis and had several questions and suggestions to give to Greystock. We will see soon enough that Greystock’s Analysis had many flaws that needed to be fixed and how it really should have been done.…
b. If the government enforces a rent control law that sets the max monthly rent at…
This report contains two case studies in the discourse of Corporate Finance, more specifically capital investment strategy. The cases are applied on the fictional company Victoria Chemicals and are divided into (A): “The Merseyside Project and Victoria Chemicals” and (B): “The Merseyside and Rotterdam project”. The cases are picked from the book “Case Studies in Finance – managing for Corporate Value Creation” written by Robert. F. Bruner.…
The organization, Victoria Chemicals, must determine whether or not to improve engineering efficiency through facility improvements at its production plant Merseyside Works.…
7. If AAA Leasing Company’s tax rate is 40%, what is the minimum lease payment that it would be willing to accept? Explain.…
The purpose of this report is to provide an understanding and analysis regarding the project proposed. The report starts with a brief overview of the company and the project proposal. This report then continues with assessing the concerns of Transport Division, ICG Sales and Marketing Department, and Treasury Staff. Furthermore, this proposal will also evaluate the recommendation from the Assistant Plant Manager. Then, the proposed analysis is compared to the Greystock’s analysis. The NPV and the IRR of the proposed analysis are lower than the Greystock’s. Nonetheless, both analysis state that the project is attractive to the company. There are some changes that need to be done in the Greystock’s analysis. The proposed analysis satisfies all the performance ‘hurdles’. Finally, there is a recommendation included for the management to discuss.…
VICTORIA CHEMICALS plc (A) The Merseyside Project Presented by Group 2 : Aldy Rifianto, Dedy Mardianto Floriana Nataly, Hiralalitya Lextro Kristiano Concorda Natallia Winata, Wita Puspadilla Yosua Bangun THE MERSEYSIDE PROJECT SUMMARY PROBLEM IDENTIFICATION ALTERNATIVE SOLUTION RECOMENDATION SUMMARY • Victoria Chemicals, a major competitor in the Worldwide chemicals industry, was a leading producer of polypropylene, a polymer used in an extremely wide variety of products SUMMARY Victoria Chemicals was…
The best offer for a lease is $7,200 a year with a total present value of $36,000. The best offer for purchasing a truck is $24,300.…
3) The price paid for the rental of borrowed funds (usually expressed as a percentage of the rental of $100 per year) is commonly referred to as the…