Reference no: EM131190114
Respond to the following scenario with your thoughts, ideas, and comments. Be substantive and clear, and use research to reinforce your ideas.
Apix is considering coffee packaging as an additional diversification to its product line. Here's information regarding the coffee packaging project:
• Initial investment outlay of $40 million, consisting of $35 million for equipment and $5 million for net working capital (NWC) (plastic substrate and ink inventory); NWC recoverable in terminal year
• Project and equipment life: 5 years
• Sales: $27 million per year for five years
• Assume gross margin of 50% (exclusive of depreciation)
• Depreciation: Straight-line for tax purposes
• Selling, general, and administrative expenses: 10% of sales
• Tax rate: 35%
Assume a WACC of 10%.
Should the coffee packaging project be accepted? Why or why not? Compute the project's IRR and NPV.
In addition, answer the following questions:
• Do you believe that there was sufficient financial information to make a solid decision on what to do?
• Was there further financial information that you required that was not provided to you?
• What financial figure do you believe was the determinant to your decision and why?
• How would you be able to apply this particular financial information to other situations?
• Discuss risk methodologies used in capital budgeting.
|
Explain why organizational structures differ
: In a PowerPoint presentation (approximately 9 slides), explain why organizational structures differ. Define and provide an example of the four reasons why structures differ, which are as follows: strategy, organizational size,
|
|
Determine the force components of the water on the nozzle
: Determine the force components of the water on the nozzle and the magnitude of the resultant force. The pressure in the hose is 400 kPa and the water exits to the atmosphere.
|
|
What type of insurance policy would you recommend
: John Jones is married, with a son, and would like to purchase enough life insurance to provide the following for his family. If he were to die, his son and wife would receive $14,400 annually for 12 years from Social Security. His wife is also the pr..
|
|
Have you ever engaged in social loafing while on a team
: Based on your self-assessment, what do you see as your strengths and weaknesses regarding working on a team? Have you ever engaged in social loafing while on a team? Why or why not? How does working effectively on a team give you an advantage in the ..
|
|
Explain risk methodologies used in capital budgeting
: What financial figure do you believe was the determinant to your decision and why? How would you be able to apply this particular financial information to other situations? Discuss risk methodologies used in capital budgeting.
|
|
Identify key ways that apples progress report has changed
: Identify the key ways that Apple's Progress Report has changed since last year.- Examine the manner in which Apple's Supplier Code of Conduct helps the organization operate as a socially responsible organization.
|
|
Journalize the adjusting entries
: The trial balance of Bellemy Fashion Center contained the following accounts at November 30, the end of the company's fiscal year., Journalize the adjusting entries
|
|
Determine one significant benefit to an organization
: Determine one (1) significant benefit to an organization that decides to lease an asset that conventional lease analysis evaluation reveals has a negative Net Advantage to Leasing (NAL). Provide a real-life scenario that supports your answer.
|
|
Five steps in the financial plan
: The book identifies five steps in the financial plan which step(s) is (are) the most critical, explain your rationale
|