Reference no: EM132932867
Another excellent international case study comes from bike manufacturer Triumph, which lost steam in its British homebased three decades ago, but found new life by heading overseas. Triumph originally formed as a bicycle manufacturing company by Siegfried Bettman in Coventry, way back in 1887. It is a 100%-owned private company. But with the explosion of motorized transport, Triumph 1, in 1902. In 2010, Triumph sold just 7,562 bikes in the UK, but 50,000 worldwide, indicating that an international interest paid off for the company. Triumph's famous factory in Warwickshire closed up shop in 1983, but the Indian factory remained, and these days, the motorcycles have become the country's Harley Davidson. The company struggles to meet demand in Indi, with a six month waiting list and a new factory being built. India's middle class has embraced the vehicle as an affordable commodity, even giving them as dowries in weddings.
REQUIREMENTS:
1. Assume the following details for Triumph, relative to its Indian Market:
Gross Sales - Php 25,000,000.00
EBIT - 4,500,000.00
Net Income - 2,700,000.00
Total Assets - 150,000,000.00
Total Liabilities - 75,000,000.00
Total Capital - 75,000,000.00
1. Apply INVESTMENT DECISION RULES. Will you ACCEPT or REJECT the project? Discuss why or why not?
2. Based on the above data, compute the following and analyze.
2.1 Return on equity (ROE)
2.2. Return of Capital, Pre Tax
2.3. Return on capital, After -Tax
3. Propose a scheme to raise capital for the Triumph. Discuss the feasibility of your proposa