The Kardell paper mill was established at the turn of the century on the Cherokee River in southeastern Ontario by the Kardell family. By 1985‚ the Kardell Paper Co. had outgrown its original mill and had encompassed several facilities in different locations‚ generating total revenues of $1.7 billion per year. The original mill continued to function and was the firm’s largest profit center. The Kardell family no longer owned shares in the firm‚ which had become a publicly traded company whose shares
Premium Mutual fund Corporate governance Corporate title
Dimitri Sakellarides Case 18 Draft Bob Prescott‚ the comptroller for the Blue Ridge Mill‚ was weighing the pros and cons of adding a new-on site longwood woodyard. Two primary benefits for this new addition include eliminating the need to purchase shortwood from an outside supplier and creating an opportunity to sell shortwood on the open market. Also‚ the new woodward would reduce operating costs and increase revenues. Blue Ridge Mill currently purchases shortwood from the Shenandoah Mill‚ which
Premium Investment Net present value Depreciation
President Birch Paper Company Although the current financial implications for Birch Paper Company are not substantial‚ as the contract in question is less than 5% of the volume in any division‚ it is imperative that Birch Company establishes and addresses its transfer price policies and procedures with each division. This will ensure that the divisions are not putting their objectives ahead of the Company’s and as a result‚ not maximizing the overall revenues and profits of Birch Paper Company. This report
Premium Cost Pricing Costs
Purpose: The purpose of this memo is to explore the issues facing Hammermill Paper Company as the company seeks to communicate a new planning process to its five‚ relatively autonomous‚ operating divisions. Summary of Changes In an effort to improve the flow of planning information between Hammermill Paper’s corporate division and the operational divisions‚ a new planning procedure has been designed. This new procedure is to be a flexible‚ two-way process. The hope for the new planning and communication
Premium Management Planning Organization
Starrett companies is certainty not immune to risks. In this paper we will be looking at the risk poised to the Starrett company in the venture of opening a distribution warehouse in Toronto Canada. 1. Internal. What are the company’s most significant internal risks and opportunities related to the project? Some internal risks to Starrett in regards to moving to Canada would be; Increasing costs: Most companies‚ and especially Starrett is not immune to the rising costs of doing business. In
Premium Risk Management Risk management
Group Case Analysis Project: “Birch Paper Company” ------------------------------------------------- Question1 Mr. Kenton should accept Bid #2 – West Paper Company at $430 as it was the lowest bid and thus will give Northern Division the highest return. Under the current company policy each division is judged independently based on profit and return‚ thus Mr. Kenton would only be interested in his own division’s success and not the overall success of the company. -------------------------------------------------
Premium Costs Variable cost Marginal cost
Snow White Paper Company "If I were to price these boxes any lower than $480 a gross‚" said James Brunner‚ manager of Snow White Paper Company’s Thompson Division‚ "I’d be countermanding my order of last month for our sales force to stop shaving their bids and to bid full cost quotations. I’ve been trying for weeks to improve the quality of our business. If I turn around now and accept this job at $430 or anything less than $480‚ I’ll be tearing down this program I’ve been working so hard to
Premium Paper
30% of out of pocket costs 120(30%*400) Total 288 West Papers Costs Total 430 Eire Papers Costs Outside linear(Southern div) 54(60%*90) Printing(Thompson div) 25 Own Supplies 312(432-5-36) Total 391 As shown in the calculations above‚ Northern should accept the bid from Thompson division as it has the lowest cost if all transfer prices within the company were calculated at costs. Incurring the lowest costs would also enable Birch Paper Company to earn the highest profits possible. 2. As alternatives
Premium Costs Cost Variable cost
In the case of Worldwide Paper Company we performed calculations to decide whether they should accept a new project or not. We calculated their net income and their cash flows for this project (See Table 1.6 and 1.5). We computed WPC’s weighted average cost of capital as 9.87%. We then used the cash flows to calculate the company’s NPV. We first calculated the NPV by using the 15% discount rate; by using that number we calculated a negative NPV of $2‚162‚760. We determined that the discount rate
Premium Net present value Cash flow Internal rate of return
Birch Paper Company Birch Paper company is a medium-sized‚ partly integrated paper company‚ producing white and kraft papers and paperboard. The company has four producing divisions and a timberland division. The responsibility structure of the Birch Paper Company and all of its divisions is a Profit or Investment Centre‚ which is stated in the case: For several years‚ each division had been judged independently on the basis of its profit and return on investment. Top management had been working
Premium Transfer pricing Price Economics