...companies, Sonora is also home to Guillermo Navallez, and has been for many years. Guillermo Navallez and his furniture company, produces a variety of tables and chairs, he even has a patented solution for his furniture. In addition, Guillermo handcrafts products are priced at a premium rate, which separates him from his competitors. Guillermo’s competition is increasing due to the inexpensive labor cost and location. After researching his competition, Guillermo has to determine the alternatives; he has available for his company. Based on the scenario, choices will include the high tech approach, or broker distributor. Team C chose the best approach to fit his need, and to represent what he has delivered for many years. Guillermo’s goal is to retire one day, and his best route to a safe, and fulfilling retirement is the hi-tech approach. High-tech Approach Guillermo’s largest competition has sparked uproar, in the communities of Sonora. Along with large retailer’s influence expanding, affordable housing, new establishments, and rock bottom pricing, he has to consider taking a different approach to stay aligned with his competition. Since the 90’s, two companies combined services, and manufacturing has created a dent in Guillermo’s business. Some of Guillermo’s foreign competitors use the high-tech approach, which provides exact specifications with lower cost. The influx in jobs raised the cost of labor, and while all this was occurring, Guillermo has watched profits shrink, and...
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...Introduction Guillermo Navallez is from the beautiful state of Sonora, Mexico. In Sonora is one of the largest furniture manufactures. Guillermo has been working in the furniture business for many years. Since Sonora has a big selection of timber it has helped to create different styles of furniture. Labor is inexpensive and Guillermo has priced his furniture for the quality of the design. As time pass there changes in the business and Guillermo has seen this effect his business. By all the changes that where happening Guillermo saw his profits go down and cost go up. Now Guillermo has to look at his choices he has to make to be able to compete (University of Phoenix, 2013). Choices Guillermo learned that there was a competitor overseas that is using high-tech approach. By using this high-tech approach competitor is able to make furniture to the exact specifications and at low prices. Guillermo looks into this choice to see what changes it would create. The second option for Guillermo is to work as distributor of furniture and keep some of high end custom work. Guillermo can also create the coating for flame-retardant and add this to his furniture (University of Phoenix, 2013). High-Tech Choice By Guillermo using the high-tech choice he would be able to use a computer controlled laser to create exact cuts in the wood. Norway high-tech company’s equipment uses highly automated and uses little labor. Since robots perform most of the precise movement and assembly functions...
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...Corporate Finance/571 The goal of this paper is to briefly discuss the Guillermo Furniture Store scenario while pointing out and tying key financial concepts and principles discussed in the textbook. The Guillermo Furniture store scenario is about a local furniture manufacturer whose business is located in Sonora, Mexico. He has enjoyed several years of success without any threat of competition. Most recently competition has come about from two different directions. Guillermo has competition via a new international furniture manufacturer who makes the same furniture with better precision, in less time, and at a much cheaper price. The next type of competition comes through the way of development of a new international airport. This is a problem because this airport development will need labor workers. This need will surely drive up the cost of wages, and thus force Guillermo’s hand in the way of increasing his wages for his employees. This is one concept from the text that will be discussed in correlation to Guillermo’s furniture store. Some of the other concepts and/or principles that will be branched into are the concepts of risk aversion, diversification, specification, and time value of money, as well as, the behavior principle, the self interested behavior, and finally the Comparative Advantage Principle. The combination of two forces of direct competition together is what forced Guillermo to change his way of doing business. The handcrafted furniture that made...
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...Guillermo tienda de muebles Muebles Guillermo es una compañía que fabrica sofás de gama media y gama alta. Con el fin de seguir el ritmo de la economía cambiante de los negocios, Guillermo tiene que hacer algunos cambios en la producción o distribución dentro de su negocio. En este trabajo estaremos determinando las decisiones del presupuesto de capital proporcionando los mayores beneficios y explicar las diferentes técnicas de evaluación de capital del presupuesto y sus diferentes técnicas. Alternativas Hay al menos tres alternativas disponibles para los propietarios de tiendas de muebles Guillermo centrarse en su negocio financiero en todos los días. Una forma de que una organización puede cumplir con sus necesidades financieras mediante el enfoque correspondiente. Este enfoque es la estructura de los pasivos de las organizaciones que corresponden a sus activos. Los riesgos asociados con la aplicación del enfoque de coincidencias es la incertidumbre de los activos correspondientes. El enfoque conservador utiliza una alta proporción de deuda a largo plazo. El enfoque conservador puede tener varios riesgos, uno de los riesgos se reducen las tasas de interés y la incapacidad de reembolsar su deuda. La otra es la deuda a largo plazo que normalmente es mayor que el costo de la deuda a corto plazo. Cualquier organización que utiliza el enfoque conservador de riesgo que no puede obtener nueva financiación, según sea necesario. El enfoque agresivo es la tercera alternativa...
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...head: GUILLERMO FURNITURE STORE Guillermo Furniture Store ACC/561 Dr. A. Matias, CPA, MBA December 15, 2010 Abstract The main purpose of Guillermo Furniture store is to obtain a control system to help management meets its organizational needs. The control system must identify responsibility, develop performance measures, establish daily monitoring, and reporting structure, weight costs, benefits, and motivation to achieve goal congruence and managerial effort. The decision-making should be centered on Guillermo’s business goals; thus, reflecting the company long term and short term goals. Team A will examined Guillermo’s Furniture Store and discuss the following: Cost relationships and behaviors in the company decision-making in implementing a control system that will help Guillermo to achieve its organizational goals. In addition, the paper will examine the break-even analysis on Guillermo’s current situation on the return on investment, and economic value added for current situation. Guillermo Furniture Store The purpose of this paper is to examine Guillermo Furniture Store decision-making prerogatives for manager, and determines, which control system would help Guillermo to achieve its organizational goals. Team A will provide a break-even analysis on the current situation considering the possible effect s of selling the flame-retardant separately. The paper will also examine return on investment, and economic value added for current situation. Guillermo Furniture...
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...Guillermo Furniture Store FIN/571 February 4, 2013 Garrick Turner University of Phoenix Instructor: Paul Stevens Guillermo Furniture Store The Guillermo furniture store is the largest furniture store in Sonora, Mexico. The store definitely has established itself as the main provider of fine art furniture, until the late 1990 when two competitors, pose as a problem for the local store. The first company is a foreign furniture company, making a good use of a high-tech approach, building furniture with exact specification. The second competition is one of the largest retailers who have expanded which caused an influx of people and jobs. This paper will evaluate Guillermo processes and determine how to handle the challenges they are facing from a changing market. Guillermo’s financial interest, return, and risk and its ability to maintain its business ethic taken in consideration if they decide to continue business on their own sticking with its traditional way of making fine furniture; Adapt the new high-tech developments of producing furniture or merge with a possible alliances, taking on new services as a distributor. The financial interest for Guillermo Furniture Store is to manufacture a product that best fit the needs of the business and its customer. Examine their budget information, can be analyze to determine if the company will be more profitable by staying independent or merging with its competitor, to become more efficient they must...
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...Guillermo Furniture Store Lori A. Poole FIN-571 Marcel A. Santiz December 12, 2011 Guillermo Navallez resides in Sonora, Mexico and has made a living for a number of years creating his own style of furniture. The area of Sonora, Mexico is not only known as a beautiful vacation spot, but it is also large furniture manufacturing location in North America. A good supply of timber is an available in this area that allows Guillermo to have access to a variety of wood to create tables and chairs for his company. For years, Guillermo has had the advantage of inexpensive labor cost and charged a premium for the quality of his handcrafted pieces of furniture (Guillermo’s Furniture Store, 2011). Guillermo eventually faced a challenge during the 1990s when two obstacles caused a dent in his business. The first obstacle was the entrance of a competitor located overseas into the furniture market. The second obstacle was the opening of a large retailer causing...
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...Guillermo Furniture Store Concepts Veena Kaushal FIN 571 October 31, 2011 Professor Del Roberts Guillerno Furniture Store Concepts Understanding the concepts of finance is important for the success of any business. As we already know, finance encompasses every aspect of a company and understanding and utilizing these concepts can make or break a business and for this reason. While analyzing the scenario for Guillermo Furniture, four finance concepts directly relate to Guillermo, which are diversification, risk-return trade-off, and observing what others are doing. In addition, the principle of incremental benefits directly relates to Guillermo Furniture. Guillermo Overview According to the Guillermo Scenario, Guillermo Navallez settled down and had started a furniture business in the beautiful town of Sonora, Mexico. The town provided Guillermo with a good location because of its sufficient supply of timber. The sufficient supply of wood allowed Guillermo to produce an assortment of tables and chairs for his new company. For years, Guillermo was happy and successful with his furniture store. However, in the 1990’s, Guillermo was faced with problematic challenges that damaged his profit margin (University of Phoenix Simulation). Challenges forced Guillermo to figure out how to reconstruct his business. The first challenge was presented by a foreign competitor using a high tech approach with low prices (University of Phoenix Simulation). The second challenge Guillermo...
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...Guillermo's Furniture Store Introduction Guillermo’s Furniture Store’s marketplace is changing. Guillermo must make organizational changes to keep up with the current marketplace. The choices presented to Guillermo each have their advantages and disadvantages. This paper will explain the different business strategies and the projected outcomes of each strategy. Without proper analysis, Guillermo could make a business decision that does not suit the company’s operational goals and objectives. Guillermo can determine the best course of action through capital budgeting techniques. Through calculating the net present value (NPV), the internal rate of return (IRR), and the weighted average cost of capital (WACC) Guillermo can determine the best course of action that will have the best profitability outcomes. Guillermo could decide to maintain doing business without making any changes to the structure of the company. If he chose to stay on his current path, furniture sales could decrease because of the competitions ability to sell quality furniture at discounted prices. Continuing with business as usual, Guillermo will miss opportunities for growth. Currently Guillermo has a net income before taxes of forty-four thousand dollars. If Guillermo continues to operate the same way he will be facing many challenges going forward. Some challenges he will be facing consists of; increased competition, residents of Sonora have better job opportunities with increased wages (University...
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...business overseas. Guillermo furniture store has been running for over ten years and has been profitable. Then the competitors moved in and brought down the profits for Guillermo. Budgeting Guillermo watched the other furniture stores operate in different aspects to make profits. Guillermo’s flex budget was close to his units budgeted to his actual. From the data collected in the previous analysis the budget and actual cost will be close. Guillermo will try to get the variance analysis close from being significantly lower. Guillermo carefully studied the other companies and how each of them operated differently and improved his or her profits. Weighted Average Cost of Capital After doing the weighted average cost of capital, Guillermo came up with 15.7% in 2010 weighted debt. Guillermo also came up for 2011 17.5%. After confirming the weighted debt Guillermo’s asset, liabilities, and total equity improved by a slight margin from 2010 to 2011, but the debt increased. Guillermo should worry about risk. His business has lost in profits, but the total liability and equity have stayed the same in the two year comparison. The comparisons have stayed the same and that is good for the balance sheet. Although, the weighted debt has gone up Guillermo should look into having a meeting with Norway to increase his business and bring down the weighted debt percentages. Sensitivity Analysis Guillermo has been observing the overseas business has high end equipment. Guillermo has his equipment...
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...Guillermo Furniture Store Analysis FIN/571 Guillermo Furniture Store Analysis Kirk B. Carlson FIN/571 Guillermo Furniture Store Analysis Guillermo Furniture Store is located in Senora, Mexico. Guillermo Navallez is the owner and has been successful in business for many years. He manufactures mid quality to high quality furniture at reasonable prices. New competitors have entered Senora, Mexico and are competing for Guillermo Navallez’s customers. As a result of the increase in competition Guillermo Furniture Store’s profit margins have been decreasing. This has forced Guillermo Navallez to re-evaluate his business and make adjustments to stay competitive. Guillermo Navallez needs to weigh his options and pick the best solution for his business. This paper will outline the cost of capital associated with the optimal weighted average, and valuation techniques that can be used by Guillermo Navallez to reduce risk. Options Guillermo Navallez goal is to become a profitable organization and to become a profitable organization he has three options that he needs to consider. The first option is to covert his facility into a high technological facility with the latest manufacturing technology. Guillermo Navallez’s initial cost for the equipment will be high, and he will have to weigh the cost of equipment with the benefits that the equipment will bring to the organization over time. Guillermo Navallez second option is to become a broker for another manufacturing company...
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...Guillermo Furniture Store Concepts Paper 1 Guillermo Furniture Store Concepts Paper 2 Introduction In the world of business, we have many financial concepts and principles that help and allow business managers to make financial decisions that give them the greatest advantage in the market. The Guillermo Furniture Store is located in one of North America’s most popular vacation spots of Sonora, Mexico. Guillermo manufactured custom made furniture with an excessive supply of local timber. Guillermo faces a new competitor within industry that uses hi-tech strategies to manufacture furniture. This paper will highlight financial concepts that will relate to the gist of the Guillermo Furniture Scenario. Outlining The Principle of Self-Interested Behavior Human behavior defines that people (act in an economically rational way people act in their own financial self-interest) (Emery, Finnerty & Stowe, 2007). Mr. Guillermo displays his desire to gain control of his business while not being pushed out of the market by a competitor that has enhanced and expanded their operation within the furniture industry. One main focus that Guillermo’s Furniture has overcome would be analyzing the benefit with advancing toward being a distributor hopefully becoming a representative operation in Norway using an automated system...
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...Guillermo Furniture Store and Pro Forma Analysis Guillermo Navellez, once the owner of the largest flourishing furniture store in Sonora, Mexico faces globalization and the emergence of foreign competition. Inexpensive labor and the abundance of timber in Sonora are major factors, which contributed to the manufacturing of the store’s furniture. Guillermo faces new competition that possesses advanced technology with the ability to manufacture faster and at lower costs. With the emergence of this sophisticated technology, the company requires change to cease the decease of revenue and sales (University of Phoenix, 2012). Guillermo hires Jevaloch Consulting Firm, Incorporated to examine his current business forecast and choose strategies in optimal working capital. Additionally, Jevaloch will also provide an efficient pro forma budget and recommend an implementation plan. Guillermo Furniture Forecast Forecasting is an important tool for estimating the future market value for the business. Jevaloch consultants began the examination of Guillermo Furniture by reviewing a six month Figure 1.1 Budget Sales Forecasts. Figure 1.2 Actual Sales Forecasts. projection of sales forecast for units of chairs, the top sales item for the store, sold from January to June 2010. Figures 1.1 and 1.2 are representative of the budget unit sales and actual unit sales for Guillermo Furniture. The average monthly demands for the budget sales is 18,014/6 = 3002.3 and 17,997/6 = 2999.5 for...
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...Guillermo Furniture Store Analysis Corporate Finance Dylan Lukens April 30, 2012 Guillermo Furniture Store Analysis The furniture store owned by Guillermo in Sonora, Mexico has operated a successful business creating custom furniture. As time went on Guillermo began to realize that other companies in the area had become interested in making furniture. The competition has forced Guillermo to consider alternatives within the Furniture Store. There are three alternatives to consider, which include going the high-tech route, being a broker, or continuing with his current model. Considering these alternatives means that a thorough analysis must be done to ensure the correct decision is made. The following will include and discuss a sensitivity analysis that will determine the optimal weighted average cost of capital (WACC) as well as calculating the net present value (NPV) of future cash flows for each alternative. As a manager of the furniture store the use of a capital budgeting techniques will be crucial. This includes a simple payback period, a discounted payback period and the net present value or NPV. The simple payback period method is the expected number of years required to recover from Guillermo’s original investment. When analyzing the incoming and outgoing cash flow it is clear that this occurred during year three of Guillermo Furniture. “Capital budgeting is fundamental because a firm is essentially defined by its assets and the products and services...
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...Manuel A. Noriega – Friend or Foe? Manuel Antonio Noriega Morena was born on February 11th, 1934 in Panama City, Panama to a poor accountant and his maid. (Tyle) At the age of five, his parents allowed a school teacher to adopt him. As a teen, he attended a well known high school, the National Institute, in preparation of becoming a doctor. During his time here, he participated in various anti-US protests. When high school was over, his family could not afford to send him to medical school so instead, Noriega accepted a scholarship to attend the Chorrios Military Academy in Peru. He graduated in 1962 with a degree in engineering. For the next few years, Noriega trained obstinately at the U.S. Army School of the Americas in Fort Benning, Georgia becoming highly decorated in intelligence, counterintelligence, and jungle operations and then went on to take a course in psychological operations (Psyops) at Fort Bragg, North Carolina. In 1967, Noriega returned to Panama and joined the Panama National Guard. One year later, he was promoted to lieutenant. That same year, the leader of Panama, Amulfo Arias was removed from power by the military a short 11 days after winning his second election. Many speculate Noriega played a major part of this military uprising. Control of government power was assumed by Colonel Omar Torrijos. Torrijos already had a great deal of respect for Noriega but one incident sealed the deal. In 1969, Torrijos was out of the country, a group of...
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