...Payback and NPV Tiffanie Lampley FINA 310, Unit 4 IP AIU Instructor Morales December 8, 2013 Abstract This essay includes projected cash flows for the next eight years. The payback period method is used to determine the amount of time it would take the company to recoup initial investment costs. The net present value is then tabulated in order to determine whether the project should be rejected or accepted. Payback and NPV A manufacturing company is thinking of launching a new product. The company expects to sell $950,000 of the new product in the first year and $1,500,000 each year thereafter. Direct costs including labor and materials will be 45% of sales. Indirect incremental costs are estimated at $95,000 a year. The project requires a new plant that will cost a total of $1,500,000, which will be a depreciated straight line over the next 5 years. The new line will also require an additional net investment in inventory and receivables in the amount of $200,000. Assume there is no need for additional investment in building the land for the project. The firm's marginal tax rate is 35%, and its cost of capital is 10%. According to the above table, the company projects revenues of $950,000 the first year and $1.5 million each successive year. Direct costs are projected to be 45% of sales giving the above figures of $427,500 the first year and $675,000 each successive year. Indirect costs are equally distributed at $95,000 each year, which...
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...Forms of Business Organizations AIU Online FINA310 Unit 1 DB Charlotte Taylor 06.09.13 Within the business world there are numerous forms of businesses global and domestic. Therefore, choosing the right form of ownership can be hectic. Although, there are numerous choices to make I hope to make the decision less hectic by discussing some advantages and disadvantages of three of the most common forms that may be right and profitable for the business. The three legal forms are: (sole) proprietorships, partnerships, and corporations. Sole proprietorships are owned by an individual who makes all the decisions about the business and therefore, pockets the revenue that is made. Sole proprietorships are the most common form of business that represents one individual owner with few legal responsibilities or requirements. Other advantages of forming a proprietorship is that they are easy to form, operate, and more affordable to form. Simply put, a sole proprietorship is a simple form of business; unfortunately, there are disadvantages for the individual. Some disadvantages are: the loss of tax-free benefits; the owner can be sued since the owner and business have become one; unlimited exposure to the owner; and the owner is responsible for all legal debts and issues that is accrued by the business and risk the loss of personal assets (AIU Online, 2013; Brooks, 2013). Partnerships are quite similar but different in their own way; a partnership is formed by two or more individuals...
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...NEW HERITAGE DOLL COMPANY FINA 6278 Case 1 I. Executive Summary New Heritage Doll Company is a U.S based children toy manufacturer with a well-known national brand: the New Heritage. With its existing three divisions, New Heritage proposed two potential investment projects in order to expand its business while the doll industry was facing a relatively low growth rate. The first proposal is the Match My Doll Clothing line expansion, which is to expand a new clothing product line aimed at matching doll and child clothing and accessories covering all four seasons. While it has potential benefits with the current fashion trend of dressing the same between dolls and children, the New Heritage is facing a challenge of entering a new field and the doubt of being continuable project or not even with a success of the first sale of the cloth collection. The second proposal is a high-end product line which is called Design Your Own Doll that targets at the firm’s existing loyal customers who already held several heritage dolls. Such a project is appropriate with the company’s core business. However, it requires large amount of investment and longtime payback period. Considering the benefits and disadvantages of both the projects, the second proposal seems more compelling due to its match of firm’s core business, longer-term focus, and possibility to enhance customer loyalty. However, the question to expand customer pool was not answered yet. As a result, the second...
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...American InterContinental University FINA-310-1301A-02: Professor Michael James February 12, 2013 The three forms of business organizations are sole proprietorship, partnership, and a corporation. A sole proprietorship is a business that is owned by only one person. This is the easiest and less complicated type of business due to the fact that not a lot of paperwork is required. The biggest advantage of this type of business is that the individual who owns the business makes all of the decisions, thus, skipping the middleman altogether. Also, the individual who own the business gets to keep all of the profit to him/herself (Brooks, 2010). With every business come disadvantages as well. The largest disadvantage of the sole proprietorship is the fact that the person who owns the business is responsible for all the bills that the business has, regardless if he/she has to sell his/her own properties to do so; there isn’t a boundary that separates business property from personal property. A second con of this type of business is that if the owner of the business were to die, the business basically dies too. In order for it to stay open, the owner would have had to sell the whole company to someone else. Last but not least, if the owner cannot gain some capital for the business, it can put a hardship on the growth of the business (Brooks, 2010). Next is the partnership. This type of business is owned by two or more people. These partners may be general partners...
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...NYSE – Euronext and the NASDAQ Name: Robert E. Smith American Intercontinental University FINA 310 – Financial Management Unit 1 Individual Project September 1, 2013 Abstract This report, providing information by study of financial management, makes a comparison of the New York Stock Exchange and the National Association of Securities Dealers Automated Quotations. We will provide a perspective difference between NYSE and NASDAQ by information used in making comparison. We will further describe the Public Company Accounting Protection Act of 2002, and provide a description of the law. Memo: To: Brokers Association From: American Intercontinental University Subject: NYSE and NASDAQ RE: Orientation Date: 08/31/2013 Introduction: In orientating our newest brokers, we provide a detailed introduction to the New York Stock Exchange and the National Association of Securities Dealers Automated Quotations, Identified best by most by abbreviation as NYSE, and NASDAQ, a report detailing the similarities of these two organizations and their differences. We further provide discussion of the “Public Company Accounting and Investor Protection Act of 2002 in describing this law as it was established and reason. Overview NYSE-Euronext and NASDAQ similarities: We begin by providing an overview of both exchange operators in making comparison determining what similarities there are in these operators of financial markets. First, the NYSE is stated to be a global operator...
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...Version 1 V Genera Certificate of Education (A-lev G al o vel) June 20 J 012 Accou A unting g (Spec ( cificati 21 ion 120) ACCN N1 Unit 1: Intro U oduct tion to Fina o ancial Acco l ountin ng F al Fina Mar S eme rk Sche e Mark schemes are prepared by the Principal Examiner and considered, together with the relevant questions, by a panel of subject teachers. This mark scheme includes any amendments made at the standardisation events which all examiners participate in and is the scheme which was used by them in this examination. The standardisation process ensures that the mark scheme covers the candidates’ responses to questions and that every examiner understands and applies it in the same correct way. As preparation for standardisation each examiner analyses a number of candidates’ scripts: alternative answers not already covered by the mark scheme are discussed and legislated for. If, after the standardisation process, examiners encounter unusual answers which have not been raised they are required to refer these to the Principal Examiner. It must be stressed that a mark scheme is a working document, in many cases further developed and expanded on the basis of candidates’ reactions to a particular paper. Assumptions about future mark schemes on the basis of one year’s document should be avoided; whilst the guiding principles of assessment remain constant, details will change, depending on the content of a particular examination paper. Further copies...
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...FINA 461 Section 1 | “Tree Values” Case Report | Huong Nguyen | 10/7/2010 | Section 1 – Executive Summary This report analyzes the case “Tree Values” to find an optimal way for Mr. Smith to manage his forestland and harvest the crop trees. The fundamental idea in this report is based on the concept of present value. A number of options are analyzed and the one with highest present value of pay off is considered. Questions 9, 10, and 11 give Mr. Smith 3 options: * Option 1: Harvest all crop trees now and receive $8,160 * Option 2: Let the forest grow without thinning, then harvest all crop trees 60 years from now and receive $537,962.01 at harvesting, equivalent to $28,800.08 now * Option 3: Thin and manage the forest, then harvest all crop trees 50 years from now and receive $670,033.56 at harvesting, equivalent to $58,429.42 now Based on the present value of the money received at harvesting, it is highly recommended that Mr. Smith should choose option 3. Furthermore, provided Mr. Smith decides to thin and manage his forest, in case he needs money soon to use for other purposes, he can harvest all of his crop trees at the 40th year to receive $410,608.68 at harvesting, equivalent to $58,325.19 at present, instead of waiting for 10 more years. This is because the present value of money received at the 40th year is just a little ($104.23) less than that of money received at the 50th year. Section 2 – Analysis Question 1 In order to choose the best offer...
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...Dr. J FINA UBUS 310 Time Value of Money Review—3 ____ 1. A perpetuity is best described as: |a. |An annuity that goes on forever | |b. |Requires the use of the CF or cash flow registers. | |c. |Contains unequal cash flows from period to period | |d. |all of the above | ____ 2. The present value of 100, 200 and 700 in years one through three, respectively: |a. |Can be determined by using the financial registers in one step. | |b. |Can be determined by using the average of the three values and then the financial registers | |c. |Can be handled as a perpetuity with a three-year life. | |d. |Can be determined by using the cash flow (CF) registers | ____ 3. The net present value of -50, 200, -59, and 300 for periods 0 through 3 at 13% is: | | | ____ 4. Refer to question 3. What is the...
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...JOHN M. CASE COMPANY Mergers and Acquisitions OCTOBER 6, 2015 FINA 5513D - MERGERS AND ACQUISITIONS Syed Ali Ahmad (100978220), Long Thanh Dinh (100986227) Zeeshan Halim (100986227) Table of Contents Executive Summary .................................................................................................................. 2 Why the J.M.C. Company is an Attractive Target for the Firm’s Management ............... 3 Why purchase the J. M. C. Company by LBO ...................................................................... 4 Target Selection ...................................................................................................................... 4 Industry ................................................................................................................................... 4 Improve Operational Performance .......................................................................................... 5 Management Competence ....................................................................................................... 5 Valuation of the LBO................................................................................................................ 6 LBO Financing Structure......................................................................................................... 7 Ownership Retention ................................................................................................................ 8 Expansion...
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...| | | |Equivalent Modules Master List |Equivalent courses offered at Aalto University, School Of Economics. | | | | | |Courses offered are subject to changes. | | |Updated information on the courses will be sent to successful candidates by Aalto | | |University, School Of Economics. | | | | | |*The same course can be transferred only as 1 course. | |First Level Modules | | |ACC1006 Accounting Information Systems |International...
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...2013 Sweet Tabasco CHOCOLATE Contenido INTRODUCCIÓN ..................................................................................................................................................... 3 Estructura del Proyecto de Inversión .................................................................................................................. 3 Breve Historia del giro .................................................................................................................................. 3 Descripción del Proyecto ............................................................................................................................. 3 Antecedentes del Proyecto .......................................................................................................................... 4 Capital Humano ........................................................................................................................................... 4 ESTUDIO DE MERCADO ....................................................................................................................................... 5 Introducción .................................................................................................................................................. 5 Producto. ...................................................................................................................................................... 7 Evaluación de alternativas para el área...
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...Fase No.1 Informacion General Integrantes: Edwin Laines Gabriela Gamboa Ricardo Valiente Gerardo Ortiz Francisco Castañeda Jose Luis Ramirez INFORMACION GENERAL 1. DESCRIPCIÓN GENERAL Desde 1953, la empresa familiar, Saúl E. Méndez ha sido pionera en el negocio de moda para hombre. Con fuerte presencia en Guatemala y Costa Rica, con 11 puntos de venta en las mejores ubicaciones, Saúl es sinónimo de innovación y estilo de vida. Una propuesta única en la región, con fuerte acento italiano y un preciso conocimiento de los mercados locales. Respecto a moda se encuentran tres ámbitos: Fashion, Sport, Formal. 1.1 HISTORIA 1,953 marca oficialmente el inicio de nuestra empresa fundada por Saúl E. Méndez y su esposa Rina Bonetto de Méndez, la cual es considerada en la actualidad una de las empresas más sólidas en el medio de la moda masculina centroamericana con líneas que van de lo formal a lo casual, proponiendo las últimas tendencias en estilo de vida. Todas las tiendas, estratégicamente ubicadas, se encuentran en los principales espacios comerciales. En Costa Rica, la marca está presente desde 1,995 y se posiciona como líder en su área con ubicaciones “Premium” en los principales centros comerciales. La calidad de los productos, unidos a la innovación, originalidad y creatividad han convertido a la marca en un referente de moda en Guatemala y la región. 1.2 MISION Y VISION Con la firme misión de crear experiencias que inspiren un estilo de vida diferente, la empresa...
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...What is the possible meaning of the changes in stock price for Berkshire Hathaway and Scottish Power plc on the day of the acquisition announcement? Specifically, what does the $2.17-billion gain in Berkshire’s market value of equity imply about the intrinsic value of PacifiCorp? May 24, 2005 marked the day of Warren Buffett’s (CEO of Berkshire Hathaway Inc.) largest acquisition since 1998. On this day it was announced that the electric utility company PacifiCorp was going to be acquired by the Berkshire Hathaway subsidiary, MidAmerican Energy Holdings Company. PacifiCorp was purchased from their “parent” company Scottish Power plc. PacifiCorp was created in 1984. They provide electricity to citizens throughout California, Oregon, Idaho, Utah, Washington, and Wyoming. Warren Buffett was looking to expand Berkshire Hathaway’s interests more deeply in the energy field. After all was said and done, MidAmerican ended up purchasing PacifiCorp from Scottish Power plc for $5.1 billion in cash and $4.3 billion in liabilities and preferred stock. Management at each company felt as though the deal was great for all those involved. Scottish Power’s CEO Ian Russell stated “we strongly believe that this transaction is in the best interests of PacifiCorp’s customers and employees” (18). The deal to acquire PacifiCorp by MidAmerican Energy Holdings Company resulted in a positive stock price increase for both Berkshire Hathaway and Scottish Power plc. Berkshire Hathaway’s Class A shares noticed...
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...| GRAND CENTAL OFFICE MARKET | | | Lisa Downing | 5/5/2009 | | Table of Contents Subject Headings Page Nos. Grand Central Office Market 1 Grand Central Scene 1 Who/What Dominates the District 2 Grand Central Office Climate 4 District Vis a Vis Office Setting 4 Historical Analysis of Market Statistics 6 Comparative Analysis: Grand Central, Midtown & Manhattan 7 History of Land Use and Development Trends 8 Grand Central Terminal Today 11 External Market Forces 12 Government Intervention 14 Employment 15 Subject Properties 18 Lincoln Building 18 JP Morgan Chase 20 Competitive Position 21 Summary & Trends 25 Projections 26 I. Grand Central Office Market Analysis The New York City Office Market is comprised of three submarkets, Downtown, Midtown and Midtown South. The Midtown submarket in the largest Central Business District in the United States; it is the submarket that the Grand Central office market is located and upon which this analysis is based. Other neighborhoods within the Midtown submarket include: Columbus Circle, Penn Plaza/Garment District, Plaza District and Times Square (Kindly refer to Appendix Nos.1 & 2). The Grand Central office market straddles in both Community Board #5...
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...MANUAL DE INSTRUÇÃO DE MANUFATURA E INSTALAÇÃO EXPERIMENTAL DO AQUECEDOR SOLAR DE BAIXO CUSTO ASBC Elaborado por SoSol - Sociedade do Sol MANUAL DO USUÁRIO Versão 3.0 Julho 2009 A equipe da SoSol agradece o envio de observações e críticas para o rápido enriquecimento do presente manual. tel: 11 3039-8317 e-mail: info@sociedadedosol.org.br site: www.sociedadedosol.org.br Antes de iniciar a montagem do ASBC leia atentamente todo o conteúdo deste manual. Aproveite e releia o conteúdo do site. Sumário 1. Apresentação 1.1 Proposta 1.2 Garantia do ASBC 1.3 Histórico 2. O sistema ASBC 2.1 O princípio de funcionamento 2.2 Reservatório 2.3 Coletor - o principal componente de um aquecedor solar de água 2.4 Misturador de água quente e sistema de apóio térmico 2.5 Sistema hidráulico 2.5.1 Sistema hidráulico e as geadas 3. Manufatura dos componentes do sistema ASBC 3.1 Coletores 3.2 Reservatórios térmicos 3.2.1 Descrição da montagem do reservatório térmico integral (só água quente) 3.2.2 Montagem do reservatório térmico misto (água simultaneamente quente e fria) 3.3 Componentes complementares do reservatório térmico 4. Instalação do sistema ASBC 4.1 Interligação dos coletores 4.2 Fixação e inclinação dos coletores 4.3 Interligação dos coletores com reservatório 4.3.1 Isolamento dos tubos de interligação 4.3.2 Proteção dos coletores solares antes do enchimento com água 4.4 Interligação entre o reservatório e o chuveiro elétrico 4.4.1 Configurações da interligação 4.4.2 Adaptação...
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