non-factor in determining the profitability of the Super Project. Simply adding the cost of erosion to Jell-O’s sales ought to be sufficient in rectifying the costs of switching the machine’s function. Before we could begin to calculate the net present values of the base case and the fully allocated costs method it was necessary to determine an appropriate discount rate. In order to do this we calculated the weighted average cost of capital by determining that General Foods Corporation return on
Premium Net present value Weighted average cost of capital Inventory
different methods of capital investments appraisal technique. Investment appraisal helps the managers when they plan for the long term strategy for the organization. In this strategy they take decision on amount which they need to invest in fixed assets and also in working capital‚ in order to increase and maintain the productive efficiency of an organization. Normally business managers have many choices to take in the shape of different projects or also each project requires different type of
Premium Net present value Rate of return
Risk Analysis on Investment Decision Net present value‚ internal rate of return‚ and profitability index are measures used to compare two mutually exclusive capital investment proposals. "SAI wants to increase market share and keep up with technology‚ which can be done by either expanding their existing Digital Imaging market share or by entering the Wireless Communication market‚" (UoP‚ 2007). Both alternatives have areas of opportunity as well as potential risks that the company will have to
Premium Investment Risk Finance
Kimtron by Fairtel have a direct cost to Fairtel equal to 96% of their sales price. Depreciation. Plant and equipment will be depreciated on a straight-line basis for both accounting and tax purposes over an expected life of eight years. No salvage value is anticipated. License fees. Kimtron will pay a license fee of 2 % of sales revenue to Fairtel. This fee is tax-deductible in Korea but provides taxable income to Fairtel. Taxes. The Korean corporate income tax rate is 30% ‚ and the U.S. rate
Premium Taxation in the United States Tax Income tax
3. Which of the following presents a summary of the changes in a firm’s balance sheet from the beginning of an accounting period to the end of that accounting period? The statement of cash flows. 4. Teakap‚ Inc.‚ has current assets of $ 1‚456‚312 and total assets of $4‚812‚369 for the year ending September 30‚ 2006. It also has current liabilities of $1‚041‚012‚ common equity of $1‚500‚000‚ and retained earnings of $1‚468‚347. How much long-term debt does the firm have? $803‚010 5. Gateway
Premium Financial ratios Balance sheet Dividend yield
Operating Costs ($M) l) Depreciation m) Taxable Income n) Tax Paid o) After-Tax Income p) Operating Cash Flow q) Capital Expenditures (CAPEX) r) Change in Net Working Capital ( NWC) s) Asset Sales (after tax) t) Free Cash Flow (FCF) u) PV Factor: 1/(1+r)t v) PV of Cash Flow (PV[CF]) w) Net Working Capital x) Book Value ($M) y) Scrap Value ($M) Suppose Ocean Carriers uses a 9% discount rate. 1) Should Ms Linn purchase the $39M capsize? Make two different assumptions. First‚ assume that Ocean
Premium Net present value Free cash flow Progressive tax
merger evaluation. The analysis includes: the industry characteristics‚ the reasons for the merger‚ the nature of the deal terms‚ discounted cash flow (DCF) spreadsheet valuation models‚ DCF formula valuation models‚ valuation sensitivity analysis‚ the value consequences of the merger‚ antitrust and competitive reaction patterns‚ and the implications of the clinical study for merger theory. JEL classification: G34‚ G20 Keywords: Mergers; Acquisitions; Alliances The Exxon-Mobil Merger: An Archetype
Premium Net present value Petroleum OPEC
Financial Review 7 2.2 Business Planning & Organizational Performance 9 2.3 Increase in Merger Activity in Europe 10 2.4 Issues related to HR Communication 10 2.5 Resource Utilization 11 TASK 3: Investment APPRAISAL Methods 12 Payback Period 12 Net Present Value (NPV) 13 IRR (Internal Rate of Return) 13 References 15 TASK 1: TESCO Tesco PLC is a British multinational retailer based in Chestnut‚ Hertfordshire‚ England‚ and United Kingdom. As per its revenues‚ it happens to be the second largest
Premium Net present value Financial ratio Time value of money
best investments to take using the capital appraisal methods. Some of the capital appraisal methods ignore the time value of money like payback and Accounting Rate of Return (ARR) as they depend on the cash flow and the profit made by this investment‚ the other methods take into consideration the time value of money using a technique called Discounted Cash Flow like Net Present Value (NPV) and Internal Rate of Return (IRR). The payback method is one of the simplest and most frequently used methods
Premium Net present value Internal rate of return Rate of return
Lauren Floral Ltd Strategic Plan: Lauren Floral Ltd. - Robert Stevenson Lauren Floral Ltd Agenda 1. 2. 3. 4. 5. 6. The Challenge Issues & Opportunities Options & Recommendation Financial Assessment Risks to Success Implementation Strategy Lauren Floral Ltd The Challenge Mission: Lauren Floral Limited (LFL) will grow and distribute premium quality roses that will bring vibrant colour‚ sweet fragrance‚ and cheer to people‚ whether purchased as gifts‚ for special occasions‚ or for everyday
Premium Cash flow Rate of return Net present value