“Coady used a strategy of focusing on reducing the number of projects in the portfolio.” Briefly describe the term portfolio in relation to the attached extract.
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“Coady used a strategy of focusing on reducing the number of projects in the portfolio.” Briefly
describe the term portfolio in relation to the attached extract.
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- CRISIS ITIn May 2007, Frontier Airlines Holdings hired Gerry Coady as chief information officer (CIO). Nearly ayear later the airline filed for bankruptcy under Chapter 11. In an interview, Coady describes how hemanaged IT projects during the bankruptcy and recession crisis of 2008–2009.Fundamentally, Coady faced a situation of too many projects and too few resources. Coady used astrategy of focusing on reducing the number of projects in the portfolio. He put together a steeringcommittee of senior management that reviewed several hundred projects. The end result was a reductionto less than 30 projects remaining in the portfolio.How Can You Get to a Backlog of over 100 Projects?“There are never enough resources to get everything done.” Backlogs build over time. Sacred cowprojects get included in the selection system. Projects proposed from people who have left the airline stillreside in the project portfolio. Non-value-added projects somehow make their way into the projectportfolio.…XY Decorations, Inc. (“XY”) is an early stage business which has forecasted a need for $1,250,000 in external funds to support expansion of its physical plant, purchase equipment and hire essential staff. Before pursuing funding, XY must develop a credible/defensible estimate of its current value. The company just finished its first six (6) months of operations during which it experienced negative cash flow and a substantial operating loss. The management team, with the assistance of financial and accounting advisors, has prepared pro forma financial statements and cash flow projections which are based on a financial model using what the team believes are reasonable operating, new CAPEX and Net Working Capital (NWC) requirement assumptions. After the next year (Year 1), the XY team projects VERY SUBSTANTIAL increases in Sales. The founding team wants to retain a 60% ownership interest in the firm AFTER the $1,250,000 anticipated capital infusion. XY’s financial Model projects…The consulting company Wilson Miller & Davis (W M D) is in that never-ending budgeting phase of the year. Realizing that they couldn’t defer a technology update any longer, the managers plan to replace all of the computers in the office. The old computers willi be sold for market value. When the new computers reach the end of their useful lives, they will be sold as well. The cost of the combined new computers and annual software updates should be more than covered by efficiency gains and increased volume of sales —at least that’s what the managers are expecting. Information related to this investment is as follows. Cost of new computers $25.500 Salvage value of new computers at end of useful life $2,500 Life of new computers (years) 5 Market value of old computers today (equal to book value) $2.100 Annual software update cost (necessary for all computers, old or new) $3,100 Annual operating cash inflows from efficiency gains and increased sales due to new computers $9.600 Minimum…
- The consulting company Miller Davis & Brown (M D B) is in that never-ending budgeting phase of the year. Realizing that they couldn’t defer a technology update any longer, the managers plan to replace all of the computers in the office. The old computers will be sold for market value. When the new computers reach the end of their useful lives, they will be sold as well. The cost of the combined new computers and annual software updates should be more than covered by efficiency gains and increased volume of sales—at least that’s what the managers are expecting. Information related to this investment is as follows. Cost of new computers $25,400 Salvage value of new computers at end of useful life $2,400 Life of new computers (years) 5 Market value of old computers today (equal to book value) $1,900 Annual software update cost (necessary for all computers, old or new) $2,800 Annual operating cash inflows from efficiency gains and increased sales due to new…Suppose you are evaluating two companies: a hotel chain that owns real estate properties in key downtown locations and near airports as well as in resort areas; and a software startup which, on a very limited budget, has put together a strong team of programmers and designers. Which of these two companies is likely to have proportionally higher dead-weight bankruptcy/liquidation costs? In other words, which company will lose a higher percentage of its value if bankruptcy occurs, thus leaving little for investors to recover during liquidation? A. The hotel chain. B. The software start-up. C. There should be no difference between the two.During the last few years, Harry Davis Industries has been too constrained by the high cost of capital to makemany capital investments. Recently, though, capital costs have been declining, and the company has decidedto look seriously at a major expansion program proposed by the marketing department. Assume that you arean assistant to Leigh Jones, the financial vice president. Your first task is to estimate Harry Davis’s cost ofcapital. Jones has provided you with the following data, which she believes may be relevant to your task:(1) The firm’s tax rate is 40%.(2) The current price of Harry Davis’s 12% coupon, semi-annual payment, noncallable bonds with 15 yearsremaining to maturity is $1,225.72. Harry Davis does not use short-term interest-bearing debt on a permanentbasis. New bonds would be privately placed with no flotation cost.(3) The current price of the firm’s 10%, $100 par value, quarterly dividend, perpetual preferred stock is $117.Harry Davis would incur flotation costs equal…
- . The directors as well as the other stakeholders of Roche Pakistan were worried as the company documented losses in 2010 after the implementation of an expansion plan. Therefore, they hired you to get the company back on tract in terms of its financial position. You being the financial analyst would analyze the current financial health and suggest that what actions should be taken to recover the losses and regain its financial health. Moreover, you are required to answer the following questions, using the recent and projected financial information shown below. Clearly explain your answers, not just no or yes. Income Statements 2009 2010 2011E Sales$ 3,432,000 $ 5,834,400 $ 7,035,600 CGS 2,864,000 4,980,000 5,800,000 Depreciation18,900 116,960 120,000 Other Expenses340,000 720,000 612,960 Total Op Costs$ 3,222,900 $ 5,816,960 $ 6,532,960 EBIT$ 209,100 $ 17,440 $ 502,640 Interest Expense62,500 176,000 80,000 EBT$ 146,600 $ (158,560) $ 422,640 Taxes (40%)58,640 (63,424) 169,056 Net…The directors as well as the other stakeholders of Roche Pakistan were worried as the company documented losses in 2010 after the implementation of an expansion plan. Therefore, they hired you to get the company back on tract in terms of its financial position. You being the financial analyst would analyze the current financial health and suggest that what actions should be taken to recover the losses and regain its financial health. Moreover, you are required to answer the following questions, using the recent and projected financial information shown below. Clearly explain your answers, not just no or yes Income Statements 2009 2010 2011E Sales$ 3,432,000 $ 5,834,400 $ 7,035,600 CGS 2,864,000 4,980,000 5,800,000 Depreciation18,900 116,960 120,000 Other Expenses340,000 720,000 612,960 Total Op Costs$ 3,222,900 $ 5,816,960 $ 6,532,960 EBIT$ 209,100 $ 17,440 $ 502,640 Interest Expense62,500 176,000 80,000 EBT$ 146,600 $ (158,560) $ 422,640 Taxes (40%)58,640 (63,424) 169,056 Net Income$…During the last few years, Harry Davis Industries has been too constrained by the high cost of capital to make many capital investments. Recently, though, capital costs have been declining, and the company has decided to look seriously at a major expansion program proposed by the marketing department. Assume that you are an assistant to Leigh Jones, the financial vice president. Your first task is to estimate Harry Davis’ cost of capital. Jones has provided you with the following data, which she believes may be relevant to your task: •The firm’s tax rate is 35%. •The current price of Harry Davis’ 12.5% coupon, semiannual payment, noncallable bonds with 15 years remaining to maturity is $1105.67. Harry Davis does not use short-term interest-bearing debt on a permanent basis. New bonds would be privately placed with no flotation cost. •The current price of the firm’s 10%, $100 par value, quarterly dividend, perpetual preferred stock is $114.27. Harry Davis would incur flotation costs…
- During the last few years, Harry Davis Industries has been too constrained by the high cost of capital to make many capital investments. Recently, though, capital costs have been declining, and the company has decided to look seriously at a major expansion program proposed by the marketing department. Assume that you are an assistant to Leigh Jones, the financial vice president. Your first task is to estimate Harry Davis’ cost of capital. Jones has provided you with the following data, which she believes may be relevant to your task: •The firm’s tax rate is 35%. •The current price of Harry Davis’ 12.5% coupon, semiannual payment, noncallable bonds with 15 years remaining to maturity is $1105.67. Harry Davis does not use short-term interest-bearing debt on a permanent basis. New bonds would be privately placed with no flotation cost. •The current price of the firm’s 10%, $100 par value, quarterly dividend, perpetual preferred stock is $114.27. Harry Davis would incur flotation costs…During the last few years, Harry Davis Industries has been too constrained by the high cost of capital to make many capital investments. Recently, though, capital costs have been declining, and the company has decided to look seriously at a major expansion program proposed by the marketing department. Assume that you are an assistant to Leigh Jones, the financial vice president. Your first task is to estimate Harry Davis’ cost of capital. Jones has provided you with the following data, which she believes may be relevant to your task: •The firm’s tax rate is 35%. •The current price of Harry Davis’ 12.5% coupon, semiannual payment, noncallable bonds with 15 years remaining to maturity is $1105.67. Harry Davis does not use short-term interest-bearing debt on a permanent basis. New bonds would be privately placed with no flotation cost. •The current price of the firm’s 10%, $100 par value, quarterly dividend, perpetual preferred stock is $114.27. Harry Davis would incur flotation costs…During the last few years, Harry Davis Industries has been too constrained by the high cost of capital to make many capital investments. Recently, though, capital costs have been declining, and the company has decided to look seriously at a major expansion program proposed by the marketing department. Assume that you are an assistant to Leigh Jones, the financial vice president. Your first task is to estimate Harry Davis’ cost of capital. Jones has provided you with the following data, which she believes may be relevant to your task: •The firm’s tax rate is 35%. •The current price of Harry Davis’ 12.5% coupon, semiannual payment, noncallable bonds with 15 years remaining to maturity is $1105.67. Harry Davis does not use short-term interest-bearing debt on a permanent basis. New bonds would be privately placed with no flotation cost. •The current price of the firm’s 10%, $100 par value, quarterly dividend, perpetual preferred stock is $114.27. Harry Davis would incur flotation costs…