Essay about Pressco Case Study

a) In the first set of calculations, the staff used a discount rate of 20%, a five-year time horizon, and ignored taxes and terminal value. What is the relative attractiveness of these three alternatives?

As a member of management Clive Jenkins is responsible for boosting employee morale to ensure that company goals are met

Star Appliance is looking to expand their product line and is considering three different projects: dishwashers, garbage disposals, and trash compactors. We want to determine which project would be worth doing by determining if they will add value to Star. Thus, the project(s) that will add the most value to Star Appliance will be worth pursuing. The current hurdle rate of 10% should be re-evaluated by finding the weighted average cost of capital (WACC). Then by forecasting the cash flows of each project and discounting them by the WACC to find the net present value, or by solving for the internal rate of return, we should be able to see which projects Star should undertake.

Total Cost of Ownership (TCO) is framework for understand the hidden costs and benefits of technology that may not necessary be apparent in the initial expense procuring certain technical solutions (Hockel & Hamilton, 2011). An example may be upgrade costs associated with acquiring a new computer. The initial pricing for the computer may be apparent, but the future costs that will be incurred to improve the unit or make more robust and proficient must also be considered.

Estimated machinery life: 3 years (after which there will be zero value for the equipment and no further cost savings)

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。

1. Assess Interco's financial performance. Why is the company a target of a hostile takeover attempt?

The third scenario was ignoring the option to invest in the second-generation project and selling the equipment in year 2. We evaluated this option as a put option. First, we calculated the probabilities for going up and down based on the assumption of a risk neutral word. As a result, the probability of going upward is calculated as 0.3375 and downward probability is 0.6625. In order to determine the present value of all the sequence cash flow at the end of year 2, we calculated the upside change rate and downside change rate as 64.87% and -39.35%, respectfully. The next step is to analyze the option value by using the “Binomial Tree” method. In order to determine the present value of all the subsequence cash flow at the end of year 2, we calculated the cash flow at each node on the tree, until 2006. We discounted all the cash flow at the risk free rate at 10%. The End of Year NPV of all the subsequence cash flow at Year 2 is calculated as $7,571,752, and the selling price of the equipment at end of 2 is $4,000,000, which is the salvage value. We found the NPV of selling the machine at end of Year 2 to be -$2,951,861 as of Year 0, which is negative. The APV of the project after adding the option turned out to be -$6,321,932. This negative APV suggest that the

The case study on Pacific Oil Company shows from beginning to end the role of power in the outcome of a negotiation. From the beginning, the problem that Pacific Oil Company faced as it reopened negotiations with Reliant Chemical Company was that they did not assert the power necessary to really end up with the outcome of the negotiation they were hoping for. The case study points out several factors that Pacific Oil Company is trying to achieve in the contract negotiations with Reliant Chemical company: the change to a surplus of VCM in the market, the possibility of Pacific Oil needing a supply of their own of VCM to produce their own PVC, and the start-up of several other companies in the production of VCM (Lewiski, n.d.). These

In January 2003, Michael Pogonowski, the chief financial officer of Aurora Textile Company, was questioning whether the company should install a new ring-spinning machine, the Zinser 351, in the Hunter production facility. This new machine has ability to produce a finer-quality yarn that would be used for higher-quality and higher-margin products. In deciding whether or not to invest this new machine, NPV and the payback period are critical factors. Firstly, we need to forecast the cash flows that the Zinser 351 will generate in the future. After calculation, the ten-year NPV will be $3, 172,582. Secondly, we use the payback period to analyze the acceptance of this project. Based on this analysis,

One of America’s largest forest products/paper firms with sales of $6.5Billion in 1983 and a net income of $105 million. The case study revolves around Atlantic Corporation’s intention to add linerboard capacity. In order to achieve this goal, they started looking at viable solutions, including purchasing and acquiring mill and box plants instead of through construction and fabrication of new plants and equipment. This included the possible acquisition of Royal Paper’s “crown jewels”, that is, the Monticello mill and the corrugated box plants.

The Industrial Revolution reshaped the world and expedited how business was conducted through the use of railroads and steam engines. Department stores soon evolved after and revolutionized how shopping was done and centralized a variety of merchandise at one central location (Tayan, 2003). With the introduction of 20th century operational management strategies such as Just in Time (JIT) and Lean Manufacturing, companies had to alter its operational efficiency and the way it conducted its business in order to grow and stay competitive. Costco Wholesale Corporation entered the wholesale club industry in the early 1980s (Tayan, 2003). The idea behind a wholesale club was to maximize profits by minimizing operational costs

1) The four flexibility improvement options presented to Kiefner vary considerably in their cost and their potential effects on strategy and profitability for the company. The first option is one of the more expensive, but would also lead to some of the most substantive changes in the actual operations of Machine #4. At the same time, despite the fact that the specialization abilities of the machine will be significantly enhanced, marketing estimates that only a seven-percent premium could be charged, and only on about thirty percent of the machine's output the expected level of use for specialized runs under this plan. Switching to a one-week changeover cycle, which s the second option for the machine, is much cheaper and would have a higher yield than the first option, with a five-percent premium on all outputs of the machine if it were operated on this "just-in-time" basis. Even if the changeover time could not be reduced, this would be preferable than an expensive change to the machine that only affected thirty percent of output. It might be undesirable form a labor standpoint, however, and this is a major strategic consideration for the company given the current atmosphere. Cost and profitability enhancements should be weighed against the potentially costly labor issues that might ensue, while at the same time it must be remembered that a return to competitiveness is necessary in order to retain jobs.

Answer: In our judgement, PepsiCo did not have a moral obligation to divest itself of all its Burmese assets. The reason being: