Hertz

We are interested in obtaining the asset beta for Collinsville investment. Here from the reading material, we find there were altogether 6 chemical companies that produce sodium chlorates. They are Hooker, Pennwalt, American, Kerr-McGee, Brunswick and Southern. However, since we are evaluating the addition of a sodium chlorate plant, the two firms (Brunswick and Southern) who specialize in producing sodium chlorate are likely the best “twins”. To determine the asset betas of each company, we

If the IRR exceeds the required rate of return (10%), the project should be accepted. Otherwise, it should be rejected.

Internal Rate of Return is a discount rate in which the net present value of an investment becomes zero. The investment should be accepted if the IRR is not less than the cost of capital. The IRR measures risk, by showing what the discounted rate would have to reach to lose all present value. Futronics Inc. investment would have an IRR of 14.79%. The investment should be accepted since it is greater than the 8% cost of capital. The 14.79% IRR shows the growth expected from the

2. New bank credit facility, 600 million cash on hand to take advantage of opportunities that may arise

Our estimated cost of capital, 20.81%, is lower than Ricketts’ expected return, 30%-50%, thus the investment is worthy. However, it’s higher than other pessimistic members’ expected return, 10%-15%, making the decision more complex and requiring further valuation。

First, raw data will be presented based on the findings found on Hertz’s 10-K annual form, as well as diving further into specific key ratios following the raw data.

7) See Table 1 NPV=42,318.71 IRR = 14% MIRR = 12% Payback period= 2.93 years. Yes the project should be undertaken.

Constantly growing firm with increasing revenue (15.5% in 2005), net profit, total assets and high returns on equity (5.1% in 2005)

Thus, by year three the company will be making a profit off the investment as year three is 86.73 million profit by 55.35 cost giving the company a 31.38 million dollar surplus. Generally, a period of payback of three year or less is acceptable (Reference Entry) causing this project to be viable based off the payback analysis. Although, these calculations are flawed. The reason for this is because the time value of money is not taken into effect when calculating payback periods which is where IRR can further assist in a more realistic financial picture (Reference Entry).

1. Based on the 10 percent compensating balance requirement, how much would Pierce Control Systems have to borrow to acquire $10 million in needed funds?

Overview: The Hertz buyout is one of the largest private equity deals. It drew criticism in the media and from union members, after the company’s new owners paid themselves $1.3 billion in dividends not long after the transaction closed and ultimately financed the payments by selling stock to the public. The company has realized hundreds of millions of dollars in improved financial results annually, but also has cut thousands of jobs as it has sought to make operations more efficient. Figure 7 provides an overview of the LBO transaction, including a time line of key events. Background: Hertz says it is the world’s largest general use car rental company, with approximately 8,100 locations in about 145

Correct valuation of real assets can present challenges to financial analysts. Different models can be used to arrive at the closest estimate of value and yet certain issues will always arise.

We have generated our recommendation based on a comparative analysis of each alternative’s ability to generate immediate cash flows versus long term viability, its impact on potential IPO, risk mitigation for investors, product launching expertise and minimizing internal disruption within company.

The bidding process for Hertz began when William Ford Jr. announced plans to explore “strategic alternatives” for Hertz in April 2005. Two months later in June, an S-1 registration statement was filed setting up a “dual track process” that would result in a Hertz IPO should other sale prospects fail. This decision affects the bidding process in multiple ways. For one there is less time for the two bidding groups to come up with a price and resulting agreement. They are forced to act quickly and find a price that the Hertz management will agree upon. If they don’t do this, then Hertz will just go through with the IPO. This could lead to a driven up price, since the bidding groups will do whatever it takes to win the bid.

Hertz product ranges from Hertz local edition, Hertz car sales, Rent2Buy, Hertz equipment rental, Hertz claim management, Connect by Hertz, and Advantage rent a car. Their core purpose is to maximize total shareholder by bringing substantial competitive advantage to the company. As such there are at least three different strategies that Hertz can follow. Firstly, it can aim for the partnering with independent small rental providers/ mobile companies to increase sales revenues. Secondly, by entering new markets segments. Thirdly, it can follow the marketing strategy of increasing advertising and promotion activities. The following are three strategic growth options which Hertz can pursue to increase the market share and to maintain the competitive advantage in the industry.