Milagrol Ltda.

There are only a few ways to increase production, which include hire more workers, increase hours, buy more equipment, and take advantage of technology to produce more. The government must form a way that the economy doesn’t grow too slow or fast so they can prevent disastrous events. The importance of modern currency lies in its purchasing power. Inflation signals the rising prices, but the way to think about it isn’t like that, but that the currency’s purchasing power decreases. With hyperinflation, fixed loans are impossible because nobody wants to risk it when the money can potentially become worthless. With moderate inflation, it can destroy wealth if it isn’t managed properly. Inflation is good for those who owe debt, but bad for those who lend money. Inflation may be bad, but deflation is worse. Prices fall because the economy is broken, but now the economy is broken because the prices have fallen.

the sale of germicidal, sanitation, and antiseptic products for health care uses. However, the beta given in the appendix is the levered beta, which we have converted to unlevered beta and then averaged the unlevered beta of the two comparable companies. This unlevered beta has then been applied to the proposed capital structure of 30% debt and 70% equity. This is the unlevered beta of the unit under consideration. This is then converted to calculate the levered project beta as 0.936. The levered beta for Chiron is 0.85 and for pathogen is 0.90. This means that Montagne Medical Instruments Company's germicidal, sanitation, and antiseptic products unit carries more business risk compared to its competitors’ viz. Chiron and Pathogen.

2008 → John Dragasevich (president), small water filtration company based out of Toronto, Ontario, considering expansion, increasingly strict regulations on wastewater management implemented by government, invest in new technology (membrane biological reactors)?

As the inflation rate rises, I will have to redistribute my income. I would have to be stricter with my spending habits compared to an economy that has a low inflation rate. As the prices of everything around me starts to go up, I will have to be able to adjust my spending habits to make sure that my necessities are taking care of and that I am still able to spend more. By the inflation rates going up, this can have a negative impact on some manufacturers. As inflation goes up, I will not be the only person in the economy cutting back on unnecessary spending and be stricter with my money. A perfect example is when the price of gas took a significant increase during the mid-2000s. Car manufactures started to see that people were spending less on purchasing cars. Another reason why I will have to stricter with my money after a significant increase in inflation rates is the idea that I may be impacted by a pay cut or completely laid off.

A. The company needs to focus on the free cash flows instead of the accounting profits since these are the funds flow the company will receive and will be able to reinvest. By examining the cash flows they will be adapt to predict the profits and/or expenses timetable. The company’s interests in these cash flows are on an after-tax basis since they are part of the shareholders dividends. Additionally, the additional cash flows are of important, because, after analyzing the project while viewing the company as a whole, the additional cash flows are seen as minimal benefits and will show the elevated value to the company if the decision is made to implement the project.

However, the investment was not without risks. There are four types of risks in international business called cross-culture risk, country risk, currency risk and commercial risk. Cross-cultural risk refers to a situation or event where a cultural miscommunication puts some human value at stake. Country risk describes the potentially adverse effects on company operations and profitability holes by developments in the political, legal, and economic environment in a foreign country. Currency risk is the risk of adverse unexpected fluctuations in exchange rates. Commercial risk refers to potential loss or failure from poorly developed or executed business strategies, tactics, or procedures (Boter & Wincent, 2010). Investment in Rulmenti Grei, Timken might face the salient risks of political and economic instability. Romania’s economic growth was slower, inflation was higher, and the labor force was more volatile. Furthermore, there might be a risk of re-nationalization. It is said that economic risk analysis tells corporate leaders the ability of a particular country to pay its debt while political risk analysis tells them whether that country will pay its debt. Political risk measures the stability of individual countries through the

7. Whether the cash flows of foreign operation directly affect the cash flows of the reporting entity.

Two discounted cash flow analyses accompany this memo. Part A contains an adjustment for possible business erosion at Rotterdam, while part B does not make that adjustment.

Also this cashflows also depend on the financing alternative we choose. In this case I used the Industrial Revenue Bond.

This case discusses Cross-Border valuation of projects. This kind of analysis is common for companies that are operating in many countries. Groupe Ariel is one such company that is considering investing in a project in its own subsidiary in Mexico. The company manufactures and sells printers, copiers and other document production equipment in many countries. As far as, expansion into new markets is concerned, company is very slow in taking initiatives as compared to its competitors owing to the recent recession. But the management of the company believes that better durability and lower after-sales service costs of their products enable

Dragasevich’s corporate goal, and one that is personal to him, was to prioritize FII’s social and environmental responsibilities at all times, ensuring that FII’s actions positively influence both the community and the environment. MBR’s are the best environmental option available in the water filtration market. If Dragasevich decides to not invest in MBR’s, he would be opposing his personal and corporate goal. If he wants to continue achieving this goal, he is obligated to invest in MBR’s.

We analyzed assumptions required to adopt each of proposed approaches. Approach (b) - $US cash flow discounted at $US rate - assumes that:

The free cash flow method is used to gauge “a company’s cash flow beyond that necessary to grow at the current rate… [to ensure companies] make capital expenditures to continue to exist and to grow” (Drake, n.d.). Calculation of free cash flows utilizes various components, including a firm’s value, cash flow forecasts, a firm’s capital structure, the cost of capital, and/or discounted cash flows.

Since this case deals with the purchase of cash flow generating assets, we will conduct a cash flow analysis in order to determine the financial validity of Atlantic Corporations’ offer.

1. Introduction 2. Analysis of current position 3. Analysis of new project 3.1 Methodologies and processes of Valuation 3.2 processes of Valuation 4. Conclusion