What factors do you think led to the demise of Toys R Us

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Reference no: EM132149019

Questions -

1. This week we discuss capital budgeting methods and process. Could you apply the knowledge your learn this week to make better decisions in your personal life or professional duties? Please elaborate your answer with examples.

2. After years of slumping sales, Toys R Us filed Chapter 11 last September to relieve a $5 billion debt burden. It said it would use $3 billion in bankruptcy financing to revamp its stores. But on March 15, Toys R Us asked the bankruptcy court for permission to "begin an immediate and orderly liquidation" of its U.S. stores. Toys R Us' principal creditors have determined that the best way to maximize their recoveries is to liquidate the existing inventory in all of the debtors' 735 remaining U.S. stores and begin an orderly wind-down of the U.S. operation.

So, what factors do you think led to the demise of Toys R Us? Does filing for bankruptcy necessarily imply that a company will be liquidated? Why is the liquidation of Toys 'R' Us expected to have such a significant impact on Hasbro Inc. and Mattel Inc.? What will happen to the amounts owed by Toys R Us to Mattel, Hasbro, and others in liquidation?

Instructions: Please answer the 2 questions above. Question 2 has multiple parts. Please answer them all. 1-2 Paragraphs per Question (4-6 sentences per paragraph).

Reference no: EM132149019

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