Road King Trucks Introduction Michael Livingston has recently been hired as the CEO of Road King Trucks, Inc. Previously he had been the marketing manager for a large manufacturing company and had established a reputation for identifying new consumer trends. Road King Trucks Inc. is a California-based truck manufacturing company. The company is well known for manufacturing large, heavy-duty trucks at a reasonable cost. One of its greatest achievements is that its trucks can be easily modified
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ROAD KING TRUCKS CASE ANALYSIS Capital is the source of fiancé through which resources are provided. It may be debt financing or equity financing. The cost of debt financing is interest which is the before tax cost of capital, while after tax cost of capital is r (1-t). If the interest rate or yield to maturity is 6.5% and the rate of tax is 40%, it means that before tax cost of capital is 6.5% and after tax cost of capital is 3.9%. In equity finance the cost of capital is dividend. If the
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Road Kings Trucks Abstract This paper is an analysis of Road King Trucks’ new project which is introducing a new product into its product line. I will decide whether run the project or not. Six issues will be discussed as follows 1) importance of energy cost; 2) project’s cash flows; 3) cost of capital; 4) choose an engine 5) evaluation 6) accept or reject. We should accept the project because of the positive NPV and high IRR. We will gain $532 million in wealth which is a big money on the
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Cost of Capital (WACC) (Ko) = (Kd*(D/(D+E)))+(Ke*(E/(E+D))) = (3.9%*(40/100))+(10.33%*(60/100)) = 7.76% Cost of capital of Road King Trucks is 7.76% (as calculated above).
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To: Subject: Road King Trucks: Project Deliverables Here is what I expect for your individual projects: A report broken down into the following sections: Summary results and recommendations—up front, concise, and to the point. Answers to the 6 questions asked—devote a paragraph to each, with individual headings Attached exhibits which are readable and understandable (I suggest using Calibri font in 11 pitch for the spreadsheet(s), because it is plain and easy to read) Spreadsheet
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Road King Trucks Case Analysis Abstract This paper is an analysis of Road King Trucks’ new project which is introducing a new product into its product line. I will decide whether run the project or not. Six issues will be discussed as follows 1) importance of energy cost; 2) project’s cash flows; 3) cost of capital; 4) choose an engine 5) evaluation 6) accept or reject. We should accept the project because of the positive NPV and high IRR. We will gain $532 million in wealth which is a big
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Road King Trucks Case Analysis Road King Trucks Case Analysis Abstract This paper is an analysis of Road King Trucks’ new project which is introducing a new product into its product line. I will decide whether run the project or not. Six issues will be discussed as follows 1) importance of energy cost; 2) project’s cash flows; 3) cost of capital; 4) choose an engine 5) evaluation 6) accept or reject. We should accept the project because of the positive NPV and high IRR. We will gain $532
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Angelica Lopez BUS 330 Business Finance Online Road King Trucks Case Paper Instructor Richard Hasse March 15, 2015 Outline Summary Mission Objectives Paper Road King Trucks Road King Trucks, Inc has been in business since 1880 and it specializes in transportation. The company was establised by the Smith brothers and it manufactured wagons. With the advance technologies and keeping up with the population they started manufacturing school buses in 1940. The school buses
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Technology in the Trucking Industry Sheila Hanson Southern New Hampshire University English Composition II (Eng.123) Professor McIntyre December 15, 2014 New Technology in the Trucking Industry Drivers who travel the interstate have shared the road with an 18 – wheeler, which incorporates a large portion of the transportation service industry (also known as the trucking industry), and have witnessed firsthand new technology working not only to protect the driver but you as well. New technology
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ROAD KING TRUCKS CASE ANALYSIS BUS 500D ANTHONY L. HUBBLE UNIVERSITY OF LA VERNE Summary: Road King Trucks was established by the Smith brothers in 1880 as the California Wagon Company and it has been manufacturing trucks for almost a century. The company has been looking to evaluate the opportunity of manufacturing “The Transit Bus”. The management has realized that the private vehicles have become very costly and people are becoming more and more aware about environmental impact
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