Caledonia Products Integrative Problems Team A March 22, 2012 FIN/370 Kimberly Corbin University of Phoenix Loop Campus Caledonia Products Integrative Problems 1. Why should Caledonia focus on project free cash flows as opposed to the accounting profits earned by the project when analyzing whether to undertake the project? a. Caledonia should focus on project free cash flow rather than accounting profits because free cash flow is what the company will receive that can be reinvested
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Caledonia Products K.C. BUS 401 Principles of Finance Prof. Andrew McIntyre March 19, 2012 Caledonia Products Businesses are started in many ways for many reasons. Many companies begin as very small businesses while others are inherited as major corporations. Most businesses have shareholders who invest in different business ventures in order to receive a profit. Whether the profit is in the form of dividends or something else
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Caledonia Products Integrative Problem Learning Team “C” Justin Griffin, Charles Ammah, Constance Allen, Edward Mason, and Mark Dawson FIN/370 April 25, 2013 Professor Bruce Huang Caledonia Products Integrative Problem Learning team C is tasked to prepare a response to the Caledonia Mini-Case located in chapter 12 of his and her readings. The team is to formulate answers to questions one through seven and describe factors Caledonia must consider if it were to lease versus
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1. Why should Caledonia focus on project free cash flows as opposed to the accounting profits earned by the project when analyzing whether to undertake the project? They need the free cash flow in order to stay in business. Caledonia needs to focus on the free cash flow amount as they can reinvest this money once they receive it back. The free cash flow gives Caledonia a sense of what the amount may be and lets them see the value at a real dollar amount. They need the free cash flow in order
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Caledonia Products Integrative Problem Part A. What is each project’s payback period? Payback period = Investment required / Net Annual Cash Inflow Project A: 100,000 / 32,000 = 3.125 years Project B: 5 years. There is no cash inflow until the fifth year when an inflow of $200,000 comes in to offset the investment. To determine payback period it is the following: Payback Period = Y + ( A / B ) where Y = The number of years before final payback year. A = Total remaining to be paid back
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Caledonia Products Integrative Problem FIN/370 February 11, 2014 Caledonia Products Integrative Problem It has been two months since team B has been hired as an assistant financial analyst at Caledonia Products; the company has been pleased with our work. They are still a little hesitant to give us work without supervision. Caledonia Products Company is introducing a new product, we have been given the assignment that involves both the calculation of the cash flows associated with a
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1 Caledonia Products Integrative Problem Christina Smith, Patricia Bryant, Kelley Randall, Ashley Irizarry FIN 370 Jan. 27th, 2014 Tarak Patel 2 Caledonia Products Integrative Problem 1. Caledonia should focus on project free cash flows because it is able to measure the company’s cash flows minus its capital expenditures. This can help a company determine the cash it is able to generate and see what cash is available to use for projects and expansion, pay dividends, or
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Caledonia Products Integrative Problem FIN/370 August 19, 2012 1. Why should Caledonia focus on project free cash flows as opposed to the accounting profits earned by the project when analyzing whether to undertake the project? It is important that Caledonia Company should focus on the free cash flows instead of the accounting profits. With the free cash flows that the company receives they can reinvest. To accurately analyze the timing of the benefit or cost we can examine the cash flows
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Caledonia Products Integrative Problem As a newly assigned assistant financial analyst at Caledonia Products, Team B has been charged with calculating the cash flows associated with the production of a new fad product which is expected to last for a five year period, provide a recommendation and respond to a number of questions on the capital-budgeting process. They must also factor in whether it should lease versus buying the equipment. Cash Flows versus Accounting Profits Caledonia should
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Caledonia Products Integrative Problem FIN/370 September 11, 2011 12a. Caledonia is considering two additional mutually exclusive projects. The cash flows associated with these projects are as follows: YEAR PROJECT A PROJECT B 0 −$100,000 −$100,000 1 32,000 0 2 32,000 0 3 32,000
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