"Aes Corporation The Case Of The Missing Department" Essays and Research Papers

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Aes Corporation The Case Of The Missing Department

Case 3: Globalizing the Cost of Capital and Capital Budgeting at AES Question 1 Explain and comment on the capital budgeting method used historically by AES. Is there a need for change? Explain. Question 2 If Venerus implements the suggested methodology, what will be the adjusted discount rate for the Red Oak project (USA) and the Lal Plr project (Pakistan)? Question 3 Calculate the effect that a revision of its cost of capital will have on the Lal Plr project’s NPV. Comment on the...

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Case Study - Aes Corporation

GRADUATE SCHOOL OF BUSINESS STANFORD UNIVERSITY S HR-3 FEBRUARY 1997 HUMAN RESOURCES AT THE AES CORPORATION: THE CASE OF THE MISSING DEPARTMENT Dennis Bakke, the CEO of AES, a company that develops, builds and operates electric power plants, sat in his office late in 1996 and thought about the question that was perennially posed to him: could AES, soon to have some 25,000 people located literally all over the world following a recent purchase of power plants in Kazakhstan, continue to operate...

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AES Case

Sunday, March 15, 2009 COST OF CAPITAL AT AES Evaluating the Historical Capital Budgeting Method Currently AES employs Project Finance Framework. Project finance tends to be used in projects with tangible assets with predictable cash flows in which construction and operating targets can be easily established through explicit contract. The key to AES projects financing lies with the precise forecasting of cash flows. In effect, the possibility of estimating cash flows with an acceptable...

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Aes Honeycomb Case Analysis

1. Describe AES’s organizational structure? What are its authority structures and control processes? What role do values play in this structure? AES organization has developed a unique decentralized “honeycomb” structure (See Exhibit 1) based on its core values. Their innovative authority structure empowered people at every organizational level to make decisions and take responsibilities according to the business needs. It helped company to achieve flexibility and accelerate decision-making...

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AES Case Analysis

AES - Case Analysis & Write up How would you evaluate the capital budgeting method used historically by AES? What is good and bad about it? Previously, the economics of a given project were evaluated at an equity discount rate for the dividends from any project and as it was mostly financed through local debt, which was non-recourse to the parent company, AES use to evaluate the dividend cash flows at a standard 12%. It is a simple approach with portions of sound reasoning. One could argue that...

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AES Corporation: Rewriting the Rules of Management

The AES Company operated with informal, ad hoc style of management: there ware no staff functions or corporate departments and almost all traditional management functions were devolved to workers at plant level. Its rationale lied on decentralization, empowerment, team-based organization, incentive compensation, job security, and some controversial policies and practices. The company committed itself to integrity, fairness, fun, and social responsibility. AES treats all their employees as responsible...

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Aes - Hbs Case Study

1. How would you evaluate the capital budgeting method used historically by AES? What's good and bad about it? Historically, the AES capital budgeting method primarily used the following assumptions: • All nonrecourse debt was regarded as good • Dividend cash flow were considered equally risky • Project was evaluated by the equity discount rate for the dividends from the project • A 12% discount rate was applied to all projects. The historical method is quite simplistic...

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Aes Case Solution

1. How would you evaluate the capital budgeting method used historically by AES? What’s good and bad about it? “When AES undertook primarily domestic contract generation projects where the risk of changes to input and output prices was minimal, a project finance framework was employed.” Usually, project finance framework is used when the project has predictable cash flows, which can easily represent operating targets through explicit contract. When cash flows are certainty, the company can have...

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CASE STUDY: CHRISTIAN CORPORATION STAFFING A Case Study Presented to Professor Ramesis M. Lorino Of Managent II: Management of Organization BICOL UNIVERSITY College of Business Economics and Management Daraga, Albay JESSICA S. FAJARDO IA Student Bachelor of Science in Management First Semester, 2007 – 2008 CASE STUDY: CHRISTIAN CORPORATION STAFFING I. TIME CONTEXT The department manager holds a regular staff meeting with...

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Case Study Goshe Corporation

Strategy and Tactics in Project Management Case Study - Goshe Corporation I’ve called this meeting to try to find out why we’re having a difficult time upgrading our EDP [Electronic Data Processing] Department to an MIS [Management Information Systems] Division,” remarked Herb Banyon, executive vice president of Goshe Corporation. Last year we decided to give the EDP Department a chance to show that it could contribute to corporate profits by removing the department from under the control of the Finance...

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