Reference no: EM13912682
Companies want to expand their business and improve their sales and profits. Instead of building manufacturing plants and installing new machineries, companies look to buy other companies and integrate them into their current business. One of the recent purchase was GE’s acquisition of Alstom to expand their power business. The following is a scaled down version of the decision process that goes into before buying another company. Company A is a major player in the energy industry and wants to expand their business by buying out company B. Company B has the right characteristics and could be bargained for $22 million dollars. There are couple of other companies also keeping their eyes on B and when exactly company A need to make a move could cost or save a good amount of money. The experts in company A feel that if they If they wait for one month, there is a 30% chance the price could be reduced by $600,000 and a 20% chance it could be reduced by $1,200,000. There is a 50% chance the price may not go down at all. If company B is available for purchase after 1 month, the following situations can be predicted.
a. If the price did not drop in month 1, there is a 60% chance of a $600,000 price reduction in month 2 and a 10% chance of $1,200,000 reduction in month 2 and a 30% chance of no price reduction in month 2.
b. If the price dropped by $600,000 in month 1, there is a 20% chance of a $300,000 price reduction in month 2 and a 20% chance of $600,000 reduction in month 2 and a 60% chance of no further price reduction in month 2.
c. If the price dropped by $1,200,000 in month 1, there is a 20% chance of a $200,000 price reduction in month 2 and a 10% chance of $400,000 reduction in month 2 and a 70% chance of no further price reduction in month 2.
If company A bought company B, they believe they could gross $30 million dollars in sales (Purchase of the company is not included). They have $22 million dollars in hand and their investments normally returns between 18 to 20%. What did Company A should do and when?
|
Complete proof that the graph bgais indeed a buffer graph
: Complete the proof that the graph BGa (defined in the proof of Theorem 5. 13) is indeed a buffer graph, i. e., for each path P E P there exists a guaranteed path with image P.
|
|
Draw a vector diagram
: A speedboat is towing a paraglider at a constant speed and height on the end of a light rope of length 30m, which makes an angle q with the horizontal. The forces acting on the paraglider are the vertical lift, L, the horizontal drag, D, his weigh..
|
|
Cost of construction incurred
: What was the cost of construction actually incurred in 2016? $125,000.How much cash was collected in 2016 on this contract? $108,000.I know question one and two is correct. I'm having trouble figuring out questions three and four
|
|
Production possibilities curve
: Using a production possibilities curve, explain (using narrative and graphs) the opportunity cost principle. Please provide a “real-world” example where this principle would be applied in the public/healthcare/nonprofit sector.
|
|
Building manufacturing plants
: Companies want to expand their business and improve their sales and profits. Instead of building manufacturing plants and installing new machineries, companies look to buy other companies and integrate them into their current business.They have $22 m..
|
|
Describe the interaction of the band members
: Who - names of the band members and the instruments they play. Include singers and where - describe the place and the audience. Include the audience behavior.
|
|
What step in the proof fails if messages can be duplicated
: Show that the relationship in Lemma 6. 19 also holds if mes sages can get lost in the channel pq, but not if messages can be duplicated. What step in the proof fails if messages can be duplicated?
|
|
Why the supply chain costs seem skewed
: Senior management wants to know why the supply chain costs seem skewed. Provide an explanation in logistical terms including an analysis of the total costs *use spread sheet*
|
|
Depreciation expense
: (b) the units-of-output method, and (c) the double-declining-balance method. Also determine the total depreciation expense for the three years by each method. (Note: For DECLINING BALANCE ONLY, round the multiplier to four decimal places. Then round ..
|