Before entering Chinese market, GreenWood Resources Inc. came up with two projects, Luxi and Dongji, however could not decide on which one. Thus, this required to conduct analysis of their differences from the following aspects: economic, social and environmental.
Economic dimension:
According to Exhibit 7, the initial Investment in Existing Plantation Assets of Luxi and Dongji were 296,565,711 RMB and 100,298,995 RMB respectively. Obviously, concerning expenses Dongji project was much more attractive than Luxi. However, it could considerably change the decisions in terms of profitability of each project.
For the first year, planting expenses of Luxi was 632RMB/mu while Donji was 255 RMB/mu. The variable cost of Luxi project was 367+110=477 RMB/mu/year, while Dongji project cost 87+45=132 RMB/mu/year. Consequently, including first year expenditure, Luxi totally costs 3,971 RMB/mu for 7 years, whereas Dongji costs 1,575 RMB/mu for 10 years. To calculate revenue, Luxi could earn 12.6×559=7,043.4 RMB/mu, whilst Dongji could get 8.0×445=3,560 RMB/mu. Then, profit per year equals (Reve...
1. I am asked to compute the before-tax Net Present Value or NPV of a new ski lift for Deer Valley Lodge and advise the management there of the profitability. Before I am able to make this calculation there are a few calculations that I will need to make first. First the total amount of the investment, this will be the cost of a lift itself $2 million plus the cost of preparing the slope and installing the lift $1.3 million.
In his article, “from King Coal: Reigning the China”, George Will developed the counterargument that America exports a large amount of global warming. Will’s rebuttal to this argument was that all over the world different counties are exporting just as much global warming. He supports this argument by appealing to logos and bringing up specific facts. For instance, Will mentions that several Australian companies were supplying Chinese power plants that are also a cause to global warming. However, he doesn’t fail to make an attempt to justify why these countries export so much global warming. Will mentions that it is more economical for America and Australia to import coal due to china enormous coal reserves; one of the biggest causes
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.
There are two solutions that provide the optimal profit given the current constraints under which JP Molasses operates. Under these conditions, the optimal profit is $63,571. This profit margin is achieved in both cases with revenue of $942,354 and cost of $412,333 for material purchased and $466,450 for fixed and variable costs in processing, for total cost of $878,783.
...eting tool that show the differences between the present value of revenues and the present value of expenses. The project can be profitable when the net present value is positive. In other words, the present value of revenues is greater than the present value of expenses. Profitability index is another tool for evaluating investment projects, which is the ratio of the PV of benefits on the PV of costs. A project can be beneficial if the profitability index is greater than 1. Also, it has the same idea as NPV that In other words, the present value of benefits is greater than the present value of costs. However, these two methods (NPV and Profitability Index) have been used to evaluate the proposal of implementing EHR.
Firstly, in assessing ourselves, we determined that our BATNA associated with $37 million. I comprised the cost of building a new plant ($25 million), loss of profits in 12 months ($12 million) and the cost of 90 day option to buy land ($0.5 million). A non-refundable expense of $10 million on buying the option for the land is considered the sunk cost. The maximum amount of money that our group could spend on this buying intention is $40 million. We decided that our target point would be $16 m...
To begin the analysis on Krispy Kreme, the first analysis is that of the depreciation analysis. There are three different methods to calculate depreciation and they are straight-line, units-of-production and double-declining-balance (Larson, Wild, & Chiappetta, 2005). The Krispy Kreme Company uses the straight-line method to calculate their depreciation on building, machinery, equipment and leasehold improvements. The breakdown of the depreciation on property and equipment consist of land, buildings, machinery and equipment, leasehold improvements and construction in process (Larson, Wild, & Chiappetta, 2005). Krispy Kreme’s total gross property and equipment in 2002 was a total of $156,484,000 and in 2003, it was a total of $252,770,000. The accumulated depreciation for the year 2002 was a total of $43,907,000 and for the year 2003, the total was $50,212,000. To find the net property and equipment amount, taking the gross property and equipment and subtracting the accumulated depreciation is the equation used. The net property and equipment for the year 2002 would be $112,577,000 and 2003 would be $202,558,000. Once b...
The estimated free cash flows for the two strategies are $391 million for the growth strategy and $365 million for the maintain strategy. (Please refer to the excel sheet for breakdown of calculation).
his company, John Lin, the CEO and founder of Shang-Wa, approaches Bernard Lester, CEO of Lester Electronics with a serious proposal to form and partnership and expand the business in to a neighboring Asian country. Lester Electronics however, has to decide whether a partnership is the best way to go, or if acquiring Shang-Wa outright would be more beneficial. This paper will go over any issues and opportunities associated with this scenario.
If the company follow this recommendations, it will obtain a profit of $ 531,000 that represents $180,000 more than with seasonal production
On the other hand, if the IDR/CNY exchange rate follows the forward rate quotes, the profitability of China would increase because the rupiah will be discounted against the yuan. When looking at the return on sales, they show that in the next five years, the profit of Noah would be high because the company will benefit from the rupiah that will be greatly discounted against the yuan. For instance, by 2015, the Indonesia rupiah would be approximately 2050 to 1 Chinese yuan.
The sales director proposed that if the firm were to reduce the price of Item 345 to FF15.00/m, they would be able to increase sales to 175,000 units (or 25% of industry volume). But if they were to keep the price at the current value of FF20.00/m, they would be able to sell not less than 75,000 units (or 11% of industry volume).
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 that had been 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’s cost of capital. Jones has provided you with the following data, which she believes may be relevant to your task.
Since more than 40 years, Toyota Company was thinking how to develop the traditional process costing system and the production system. Some of the companies believe that the increasing of the production is a big profit, while Toyota proved the opposite. The more you increase the products out of the need of the market, the more losses you are going to gain. This kin...
Luo, Y. (1997), Pioneering in China: Risks and Benefits, Long Range Planning, 30(5), 768 - 776