407 Homework 1

A | Continue operating the cruise ship in the current area. | 10% | $1.0M | $0.9M | $0.7M | $0.7M | $0.7M | $4.0M |

15) Refer to the table. What is the average number of customers waiting to be served?

What is the net present value of this follow-up investment and the combined base and expansion investments?

2. Use the projections provided in the case to compute the incremental cash flows for the PCB project. Provide a reasonable estimate for cash flows after 2009 as well.

Project C: This project will be a scale-up of a project done last year. All the same processes will be used. The costs for the material and other resources should be scalable based on last year’s costs.

I have project that the first-year revenue of $20,000 and a 15% growth rate for the next two years. The complete cost of sales is projected to average 50% of gross sales, including 40% for the purchase of equipment and 10% for the purchase of additional items. Net income is projected to reach $70,000 in four three as sales increase and operations become more

3.) What effect, if any, would HVC’s willingness to commit an additional $100,000 during the first year have on the recommended percentage of each project that HVC should fund?

Private and commercial are the two purposes of the vehicle production in the industry (Ibisworld, 2013). In order to grow the revenue and profits, a new small-car production plant was build by Holden in Adelaide in 2010 (Holden annual report, 2012). Holden paid attention to become a global player depends on the GM plant in Thailand. This plant became a base to help Holden expand its reputation in Asia-Pacific region and reduce the production costs for the production (Ibisworld 2013).

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

* Investment in plant upgrades that provide the greatest benefit for each plant, which is most likely any of them except for plant upgrade: C.

Their mine and production facility at Vanscoy has a current production capacity of over two million tons annually. Expansion projections of 750,000 tons would increase production levels by up to 40 percent.

Considering the financial statements provided in case A, if we take the operating profit divided by the days per year and average occupancy rate, the average profit per room

Airbus predicts that there would be demand for more than 1500 super jumbos over the next 20 years that would generate sales in excess of $350 billion. And they could sell as many as 750 over jumbos over the next 20 years with a break even on undiscounted cash flow basis with the sales of only 250 planes. There is a huge profit in this business if Airbus succeeds in the industrial launch of A3XX jumbo jets.

5. The project is assumed to end in year 4. Do you think that this is realistic? Can you estimate the value of the project’s operating cash flows beyond year 4? State any assumptions you made.

This project has decided that the initial investment will be partly financed by parent and subsidiary, at debt of 35 % from parent (uk) and 35% from host country (south Korea) to complete the initial investment.