Group F Module 8 Mini Case

Q1.  Ecobank has decided to enter the microfinance market to seek more favourable growth and profit opportunities. After extensive search of a large number of potential candidates to merge with, it narrowed the candidates down to Sika Savings. As a financial analyst for Ecobank, you have been asked to investigate the merger with Sika in order to advise management. Some basic data gathered about the two institutions and presented to you are provided in the table below:                                                 Ecobank                          Sika Earning Per Share                   ¢5.00                            ¢1.50 Share Price                             ¢90.00                           ¢20.00 Number of Shares                  1000,000                       600,000 Price Earning Multiple            18x                                13.33x Further investigations conducted revealed that investors currently expect a steady compound growth of about 6% each year in Sika’s…

Assignment Exercise A1) Salalah company management is considering two competing investment Projects A and B. Project A 1000 Year Project B Initial Investment 1000 1 275 300 275 300 275 300 4 275 300 5 275 300 DISCOUNT RATE 3.15% Q1) Use the information below and help the management in choosing the monst desirable Project using all the following techni 4) Profitability Index Technique. Q2) Based on your solution or answer to question 1, comment as to which proposal is better and why? بناءً على حلك أو إجابتك على السؤال 1 ، قم بالتعليق على أي اقتراح أفضل ولماذا؟

23 The Hanks Co is considering two projects. Project A consists of building a bee sanctuary on the firm's small parcel of land. Project B consists of building a retail store on on that same parcel. The parcel can accommodate only one of the projects. Which method of analysis is most appropriate for an analyst to employ? A. Accounting rate of return B. Profitability index C. NPV D. Payback E. IRR

13. The replacement chain approach - Evaluating projects with unequal lives Aa Aa Evaluating projects with unequal lives Your company is considering starting a new project in either France or Mexico-these projects are mutually exclusive, so your boss has asked you to analyze the projects and then tell her which project will create more value for the company's stockholders. The French project is a six-year project that is The Mexican project is only a three-year project; however, your expected to produce the following cash flows: company plans to repeat the project after three years. The Mexican project is expected to produce the following cash flows: Project: French Year 0: -$650,000 Project: Mexican Year 1: $220,000 Year 0: -$475,000 Year 2: $240,000 Year 1: $225,000 Year 3: $245,000 Year 2: $235,000 Year 4: $270,000 Year 3: $255,000 Year 5: $120,000 Year 6: $100,000 Because the projects have unequal lives, you have decided to use the replacement chain approach to evaluate them. You…

Question 1 (a) Explain how the Fisher separation theory shows that, under certain conditions, shareholders can delegate to managers the task of choosing which physical investment projects to undertake. What specific conditions must hold for this to be true? (b) PJP, an industrial manufacturer, is considering a new capital investment project to make and produce and sell a new type of electrical generator. The first stage of the project requires an investment of $8,000 now for the initial design and market research. There is a 40% probability that this phase will be successful. If it is not successful (probability 60%), the project will be abandoned with zero salvage value. If the first stage is successful, a further investment of $300,000 will be required one year from now to make and test prototype generators. If this second stage is not successful (probability 55%), the prototypes could be sold for $40,000. If it is successful (probability 45%), PJP would go ahead and produce the…

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bMy Questions bartleby X X [Solved] Buy Coastal, InX C Consider The Following X payback period formula Chapter 9 Homework Assignments: FIN 3504 х X ezto.mheducation.com/hm.tpx Paused АВP Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) -$344,000 51,000 71,000 71,000 446,000 -$ 49,000 24,600 22,600 20,100 15,200 1 2 3 4 Whichever project you choose, if any, you require a 15 percent return on your investment. a-1 What is the payback period for each project? (Round your answers to 2 decimal places. (e.g., 32.16)) Payback period Project A years Project B years a-2 If you apply the payback criterion, which investment will you choose? Project A Project B b-1 What is the discounted payback period for each project? (Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16)) Discounted payback period Project A years Project B years b-2 If you apply the discounted payback criterion, which investment will you…

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Profitaility Index Please solve for the profitiability index and explain. The information is attached.   ** The previous person answered it incorrectly*** The only answer that was correct was Project B 1.5 PLEASE ENURE ACCURACY

Please help with this question and work out by step cuz most responses are wrong

Assignment Exercise A1) Salalah company management is considering two competing investment Projects A and B. Project A 1000 Project B 1000 Year Initial Investment 1 275 300 275 300 275 300 4 275 300 300 5 275 DISCOUNT RATE 3.15% Q1) Use the information below and help the management in choosing the most desirable Project using all the following technique: استخدم المعلومات الواردة أدناه وساعد الإدارة في اختيار المشروع الأكثر رواجا باستخدام جميع الأساليب التالية 1) Payback Period Technique. 2) Discounted Payback Period Technique. 3) Net Present Value Technique 4) Profitability Index Technique. Q2) Based on your solution or answer to question 1, comment as to which proposal is better and why? بناءً على حلك أو إجابتك على السؤال 1 ، قم بالتعليق على أي اقتراح أفضل ولماذا؟

All parts are under one question, per your policy all parts can be answered.  3. Analysis of an expansion project Companies invest in expansion projects with the expectation of increasing the earnings of its business. Consider the case of Yeatman Co.: Yeatman Co. is considering an investment that will have the following sales, variable costs, and fixed operating costs:     Year 1 Year 2 Year 3 Year 4 Unit sales 3,000 3,250 3,300 3,400 Sales price $17.25 $17.33 $17.45 $18.24 Variable cost per unit $8.88 $8.92 $9.03 $9.06 Fixed operating costs $12,500 $13,000 $13,220 $13,250   This project will require an investment of $15,000 in new equipment. Under the new tax law, the equipment is eligible for 100% bonus deprecation at t = 0, so it will be fully depreciated at the time of purchase. The equipment will have no salvage value at the end of the project’s four-year life. Yeatman pays a constant tax rate of 25%, and it has a weighted average cost of…

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Question 1: Salalalh Methanol company management is considering three competing investment Projects A, B & C_ Year Initial Investment 1 Project A Project B Project C 12000 12000 12000 1200 3100 4150 5260 5225 8250 3800 7360 9275 9300 4 4600 9460 Assume a discount Rate of 5.45 % Use the information above and help the management in choosing the most desirable Project using Payback period, Discounted payback Net Present value and Profitability Index. Out of the four methods which is considered to be the most desirable. Explain

[EXCEL] Net present value: Blanda Incorporated management is considering investing in two alternative production systems. The systems are mutually exclusive, and the cost of the new equipment and the resulting cash flows are shown in the accompanying table. If the firm uses a 9 percent discount rate for production system projects, in which system should the firm invest? Please use excel.   Year    System 1         System 2 0          −$15,000        −$45,000 1          15,000            32,000 2          15,000            32,000 3          15,000            32,000

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1. Shell Company is exploring two mutually exclusive opportunity. There are two available opportunities for Shell with the following information: a. Petron Company has projected annual returns of Php7 Billion and outstanding liabilities of Php5 Billion. b. Diesel Company has projected annual returns of Php12 Billion and outstanding liabilities of Php20 Billion. c. Both companies have terminal value of Php100 Billion. Using the information above, which is a better choice if the initial investment for Petron Company and Diesel Company is Php50 Billion and Php110 Billion, respectively. The cost of capital for the two companies are 10%.

A large multinational corporation is considering acquiring a smaller competitor to expand its market share. The potential acquisition could provide access to new customers, technology, and operational synergies. However, integration risks, cultural differences, and regulatory challenges pose threats to the deal's success. The acquiring company must carefully analyze the target's financial health, customer base, and operational fit. Due diligence will reveal if the acquisition is worth the premium price. Moreover, the method of financing the acquisition-through cash, stock, or debt-will affect the financial impact. Should the company proceed with the acquisition, and if so, how can it mitigate potential risks? The decision hinges on strategic alignment and financial return.

All the parts are under one questions and per your policy can be answered in full.  3. Analysis of an expansion project Companies invest in expansion projects with the expectation of increasing the earnings of its business. Consider the case of Garida Co.: Garida Co. is considering an investment that will have the following sales, variable costs, and fixed operating costs:     Year 1 Year 2 Year 3 Year 4 Unit sales 4,800 5,100 5,000 5,120 Sales price $22.33 $23.45 $23.85 $24.45 Variable cost per unit $9.45 $10.85 $11.95 $12.00 Fixed operating costs $32,500 $33,450 $34,950 $34,875   This project will require an investment of $20,000 in new equipment. Under the new tax law, the equipment is eligible for 100% bonus deprecation at t = 0, so it will be fully depreciated at the time of purchase. The equipment will have no salvage value at the end of the project’s four-year life. Garida pays a constant tax rate of 25%, and it has a weighted average cost of…

A firm is considering the following independent projects.       Project         Investment    Present value offuture cash flows       NPV        A $130  $176 $46 B $103   $115 $12 C $183   $287 $104 D $161   $199 $38 E $184  $273  $89   What is the Profitability Index of Project B? Question 5Answer a. 0.85 b. 1.12 c. 0.89 d. 1.18