...Running head: PROBLEM SOLUTION: LESTER ELECTRONICS Problem Solution: Lester Electronics University of Phoenix Problem Solution: Lester Electronics Lester Electronics is at a turning point in the business world. Bernard Lester has found that they cannot continue to manage the business as has previously been done in the past. The changes in the industry and the possible loss of their largest vendor, Shang-wa, are two of the main challenges facing Lester. One is growth, which represents an essential component of a successful, long-term business strategy. Various internal growth strategies exist; add new and improved products to the portfolio, target new markets, move into additional geographic areas, increase the number of stores. Second being, the number of external growth strategies can also be considered. The main ones is a merger or acquisition. This strategy should be employed when it would be more profitable and efficient for a company to obtain desired characteristics. John Lin, founder and CEO of Shang-wa, is looking to spend less time with his business and more time with his family. John Lin has informally suggested to Bernard that they become partners that would enable both companies to meet the growing demands for their products. Shang-Wa finds that they are on the verge of being taken over, this not what John wants for his company. Transnational Electronics Corporation is making a run to takeover John Lin’s company. John Lin is feeling pressured to sell...
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...• Japan • Korea • Mexico • Singapore • Spain • United Kingdom • United States Copyright 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. This is an electronic version of the print textbook. Due to electronic rights restrictions, some third party content may be suppressed. Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. The publisher reserves the right to remove content from this title at any time if subsequent rights restrictions require it. For valuable information on pricing, previous editions, changes to current editions, and alternate formats, please visit www.cengage.com/highered to search by ISBN#, author, title, or keyword for materials in your areas of interest. Copyright 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage...
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...Finance 2 March, 2015 Case 26 – Star River Electronics Ltd. Introduction Star River Electronics is a joint venture between England’s Starlight Electronics Ltd. and an Asian venture-capital firm, New Era Partners. Star River Electronics is based in Singapore, and its mission was to manufacture CD-ROMs as a supplier to major software companies. Star River Electronics has gained fame in the industry for producing high quality discs. As the optical and multimedia products became more and more popular in the mid-1990s, CD-ROM manufacturing industry experienced rapid growth during this time. Due to this effect, small manufacturers overreacted, creating oversupply that pushed prices down by as much as 40%. Consolidation followed as less efficient producers went out of business. Because of its superior reputation, Star River was able to survive the shakeout. While other CD-ROM manufacturers floundered, Star River’s volume of sales grew at a robust rate in the past two years. Unit prices, however, had declined because of increasing competition in the market and the growing popularity of substitute products, especially digital video discs (DVDs). DVDs had 14 times larger storage capacity and is a threat to displace CD-ROMs. Although, CD-ROMs still comprised 93 percent of all optical-disc-drive shipments in 1999, a study predicted that this number would fall to 41% by 2005, while DVD drives would fill the remaining 59%. Star River Electronics had begun to experiment with DVD manufacturing...
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...au/commpapers/164 Computing the divisional cost of capital using the pure play method Henry W. Collier (University of Wollongong) Timothy Grai (Oakland University) Steve Haslitt (Oakland University) Carl B. McGowan, Jr. (Norfolk State Universtiy) COMPUTING THE DIVISIONAL COST OF CAPITAL USING THE PURE PLAY METHOD1 ABSTRACT: The Cost of Capital Model is used to calculate the net present value of projects within a multi-unit corporation but may provide incorrect answers for projects that have a level of risk that differs from the overall average risk level for the corporation. We demonstrate the use of the Pure Play Method for calculating the required rate of return for a division of a corporation that has risk characteristics that differ from the risk characteristics of the overall corporation. We apply this methodology to the Integrated Electronic Systems Segment of the Motorola Corporation. We find that the IESS division cost of capital of is 9.3% rather than the 12.3% cost of capital for the corporation as a whole. USING THE WEIGHTED AVERAGE COST OF CAPITAL The goal of corporate financial management is to maximize the value of the firm as measured by the total...
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...Star River Electronics Ltd. Executive Summary Group 6 Josh Patience Eli Hohbach Mary Chicoine Star River Electronics was founded as a joint venture between Starlight Electronics Ltd., United Kingdom, and an Asian venture-capital firm, New Era Partners. Star River Electronics produced CD-ROMS as a supplier to major software companies. In the last two years, CD-ROM sales have grown at a healthy rate, however, their unit prices have dropped due to the introduction of digital video discs (DVD’s). Tasked with a declining trend in CD-ROM usage, and a growing usage of DVD’s in the market, Star River hoped that their newly installed capacity would help them stay in the market and increase their proportion of revenue from DVD’s. Star River Electronics steady growth rate of sales of 15% is one positive sign from the analysis, however, there’re many red flags concerning Star River Electronics. The operating margin, return on sales, return on equity and return on assets all seem to decline from 1999 to 2000. There was also a giant jump in inventories from 1999 to 2000. This would explain their newly installed capacity that they were talking about earlier. This new capacity was more than likely financed with debt as their debt/equity and debt/capital ratios all had a significant jump in 2000. Linked with declining sales in CD-ROM’s and an increasing amount of debt; one could believe that the riskiness of Star river Electronics have gone up. The financial forecasts for 2002...
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...of business or shareholder capital gains, with the objective of bringing in the highest possible return. The wealth maximization strategy generally involves making sound financial investment decisions which take into consideration any risk factors that would compromise or outweigh the anticipated benefits. 2. Factoring is a financial option for the management of receivables. In simple definition it is the conversion of credit sales into cash.Factoring, a financial institution (factor) buys the accounts receivable of a company (Client) and pays up to 80%(rarely up to90%) of the amount immediately on agreement. Factoring company pays the remaining amount (Balance 20%-finance cost-operating cost) to the client when the customer pays the debt. 3. A financial product sold by financial institutions that is designed to accept and grow funds from an individual and then, upon annuitization, pay out a stream of payments to the individual at a later point in time. 4. The NPV formula solves for the present value of a stream of cash flows, given a discount rate. The IRR on the other hand, solves for a rate of return when setting the NPV equal to zero (0). In other words, the IRR answers the question “what rate of return will I achieve, given the following stream of cash flows?”, while the NPV answers the question “what is the following stream of cash flows worth at a particular discount rate, in today’s dollars? Section B: Case lets I 1. Dangers of Inadequate Working Capital The following...
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...FIN 751 Financial Management Company Analysis for Samsung Jiachao Geng Tianyi Cheng St. Thomas University Feb 23, 2014 “I certify that I am the author of this paper and that any assistance I received in its preparation is fully acknowledged and disclosed herein. I have also cited any sources from which I used data, ideas or words, either quoted directly or paraphrased. I also certify that this paper was prepared by me specifically for this course and is not a replication of a paper submitted for another course.” Name of student:……Jiachao Geng………Tianyi Cheng………… Signature:………………………….………………………… Outline The introduction of Samsung…………….......................………………………….04 Document analysis……………………………....................………………………..05 SWOT analysis of Samsung……………………………...……….......…………….07 Modal analysis………………………..…………………….............................…….12 Conclusion...................................................................................................................16 References…………………………………………………….……………………..17 The introduction of Samsung Samsung has been found since 1938. In the past ten years, Samsung got the perfect grade in market of e-consumer. It arrived a new top in 2005, and Samsung surpassed Sony, LG and MOTO by the 15 billion of market value in the same year. This result made Samsung the twentieth in the word, and it was increased by 186% to the year of 2000. This efficiency also made it become the fastest developed enterprise from the...
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...Financial Management Part Two: 1. What do you understand by wealth maximization? Ans : A process that increases the current net value of business or shareholder capital gains, with the objective of bringing in the highest possible return. The wealth maximization strategy generally involves making sound financial investment decisions which take into consideration any risk factors that would compromise or outweigh the anticipated benefits. 2. Discuss the concept of factoring. Factoring is a financial option for the management of receivables. In simple definition it is the conversion of credit sales into cash. In factoring, a financial institution buys the accounts receivable of a company (Client) and pays up to 80%(rarely up to90%) of the amount immediately on agreement. Factoring company pays the remaining amount (Balance 20%-finance cost-operating cost) to the client when the customer pays the debt. Collection of debt from the customer is done either by the factor or the client depending upon the type of factoring. The account receivable in factoring can either be for a product or service. Examples are factoring against goods purchased, factoring for construction services (usually for government contracts where the government body is capable of paying back the debt in the stipulated period of factoring. Contractors submit invoices to get cash instantly), factoring against medical insurance etc. 3. Define Annuity. Series of payments at fixed intervals...
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...Case Assignment week #2 The Creation of Geek Squad Technology has made communication easier and quicker while at home and while out running errands. It is constantly and persistently changing and advancing around us every day. The first key environmental factor that created an opportunity for Robert Stephens to start the Geek Squad was realizing that being attempted to stay aware of the numerous environmental changes has brought on chaos and will proceed so as long there is innovation, “particularly those related to computers, technology, software, communication, and entertainment” (Kerin, 85). Many consumers had trouble and found it hard installing, operating, and using electronic products. Some of them complains that it takes time to read the manuals. However, that being the second key environmental factor, Robert Stephens, founder of the technology support company Greek Squad, came up with the solution: “I’m going to save you that time because I stay home on Saturday nights and read them for you” (85). Stephens gave up on everything that he has gained, such as an Art Institute scholarship looking forward to get his degree in Computer Science. While student he took a part time job for a research laboratory and began repairing televisions, computers, and a variety of other items. He realized that most people needed some sort of technologic help and that “they saw value in a service whose employees would show up at a specified time, be friendly, use understandable language...
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...Conch Republic Electronics Conch Republic Electronics is a mid sized electronics manufacturer located in Key West, Florida. The company president is Shelley Couts, who inherited the company. When it was founded over 70 years ago, the company originally repaired radios and other household appliances. Over the years, the company expanded into manufacturing and is now a reputable manufacturer of various electronic items. Jay McCanless, a recent MBA graduate, has been hired by the company's finance department. One of the major revenue-producing items manufactured by Conch Republic is a personal digital assistant (PDA). Conch Republic currently has one PDA model on the market, and sales have been excellent. The PDA is a unique item in that it comes in a variety of tropical colors and is preprogrammed to play Jimmy Buffett music. However, as with any electronic item, technology changes rapidly, and the current PDA has limited features in comparison with newer models. Conch Republic developed a prototype for a new PDA that has all the features of the existing PDA but adds new features such as cell phone capability. The company has performed a marketing study to determine the expected sales figures for the new PDA. Conch Republic can manufacture the new PDA for $200 each in variable costs. Fixed costs for the operation are estimated to run $4.5 million per year. The estimated sales volume is 70,000, 80,000, 100,000, 85,000, and 75,000 per each year for the next five years, respectively...
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...Licensed to: iChapters User Eugene F. Brigham UNIVERSITY OF FLORIDA Joel F. Houston UNIVERSITY OF FLORIDA Copyright 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Eugene F. Brigham UNIVERSITY OF FLORIDA Joel F. Houston UNIVERSITY OF FLORIDA Copyright 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Licensed to: iChapters User This is an electronic version of the print textbook. Due to electronic rights restrictions, some third party content may be suppressed. Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. The publisher reserves the right to remove content from this title at any time...
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...Gator’s discounted cash flow analysis, there are numerous assumptions that need consideration in the valuation of which audit procedure adopted. In the Goodwill Impairment Analysis Summary, the key assumptions looked at concerned the financial flow of the cash handled in the company. These were the discount rate, depreciation rate, incremental working capital, long-term growth rate, corporate income tax rate. The analysis considered the discount rate to be low, and as identified by thirteen percent, the cash flow chart assumed effects on the financial return. The impact of the discount rate assumption depended on the quality of the outcome of the audit result. The charges put on the discount audited for the Gator company performance. The use of the default charges enables the auditor to leave out the use of all the assets value in the total cash flow chart. The starting asset rate examined to assist in evaluating the risks likely to rise in the company performance. By attending to the asset defaults, the depreciation rate identified to allow the auditor’s report on the actual cash flow identification. The Gator Company identified the depreciation rate to be at 2.5% on the general financial audit result. The assumptions neglected the scrutiny on the annual category of the assets and the annual financial accumulation on the projected company amounts....
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...whether the smartphone proposal should be adopted. You are encouraged to use numerical evidence to support your answer. (36 marks) There are many strengths and weaknesses that Scott Electronics Plc would face if they accept or do not accept the smartphone proposal. They are intending on developing a smartphone for the ‘baby boom generation’ aged 45 to 65. As presented in Appendix A, figure 1, 25% of the UK population will be aged between 45 to 65 in 2014; eventually rising to a 30% increase by 2019. This could lead to potential growth for Scott Electronics in that target market segment; being a great opportunity as the market is growing. By entering a new product within this growing market, it would increase the likelihood of success as it enables them to ensure that the smartphone is targeted specifically towards this age group. In effect, this would lead to an increase in sales and investments of phones; thus generating higher profits – especially long term as the market’s growth expectations are to rise by 30%. The Head of New Product Development approached a supermarket that was keen on extending their range of electrical products; they highlighted the fact that their target market was mostly aimed at middle-aged and middle-class. Therefore, this matches with the market that Scott Electronics hoped to exploit in, which strengthens the opportunity of accepting the smartphone proposal. This encouraging information explains that the middle class are keen and interested in new...
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...I. Background Best Buy (“BBY”) sells consumer electronics such as computers, computer software, video games, music, DVDs, Blu-ray discs, mobile phones, digital camera, car stereos and video cameras, as well as home appliances (washing machines, dryers, and refrigerators). Salespersons are hired on a non-commissioned basis. Each store also includes a department for audio/visual equipment for automobiles, offering on-site installation services, as well as the Geek Squad "precinct" for computer repair and warranty service and accidental service plans. As of February 27, 2011, there are 1,069 BBY stores, 74 BBY Mobile stand-alone stores, 35 Pacific Sales showrooms, eight Magnolia Audio Video stores and six Geek Squad stand-alone stores in the U.S. BBY also operated 887 Carphone Warehouse and 1,566 The Phone House Stores in Europe, 64 Canada BBY stores, 144 Future Shop stores in Canada, 158 Five Star stores in China, six BBY China stores, five BBY Mexico stores and one BBY Turkey store. (Best Buy). BBY stores in the US average approximately 39,000 retail square feet, and offer products in six revenue categories: consumer electronics (39% of FY 10 (Feb.) revenues), home office (34%), entertainment soft- ware (16%), appliances (4%), services (6%), and other (1%). BBY's largest category, consumer electronics, includes products such as televisions, digital cameras and accessories, digital camcorders and accessories, e-readers, DVD players, MP3 players and accessories, musical...
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...Canada. Capital Structure Examining which capital acquisition methods will maximize shareholder return is an important step in exploring the possibility of expansion. Earnings before interest and tax were examined for each year using the approaches below. The total needs are expected to be $600,000. Earnings per Common Stock Share 12% Bonds 50% Preferred (5%, $50 par) and 50% Common Stock 20% 12% Bonds and Common Stock 40% 12% Bonds and Common Stock 60% 12% Bonds and Common Stock Year 9 0.002 0.027 0.027 0.023 0.017 Year 10 0.009 0.032 0.032 0.028 0.023 Year 11 0.019 0.039 0.038 0.035 0.031 Year 12 0.031 0.048 0.046 0.043 0.04 Year 13 0.042 0.057 0.054 0.052 0.049 0.103 0.203 0.197 0.181 0.16 Obtaining the funds by issuing common stock for 50% and preferred stock for 50% is the most lucrative and is the best option for Competition Bikes. There is no interest on bonds, because they aren’t being used. Net income is higher than the other methods. Preferred stockholders will find this investment attractive and will invest knowing that they will be paid before the common stockholders so there is less risk to them. Earnings per common stock share is higher with this approach that the other methods. Obtaining the funds needs by issuing 12% funds for 100% of the financing needs returns half of what the 50% preferred/50% common stock methodology over the 5 years. The interest paid...
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