Whitefish inc operates a fleet of 15 fishing boats in the

Reference no: EM13396387

Whitefish inc. operates a fleet of 15 fishing boats in the North Atlantic Ocean. fishing has been good in the last few years as has the market for product, so the firm can sell all the fish it can catch. Charlie Bass, the vice president for operations, has worked up a capital budgeting proposal for the acquisition of new boats. Each boat is viewed as an individual project identical to the others, and shows an IRR of 22%. The firm's cost of capital has been correctly calculated at 14% before the retained earnings break and 15% after that point. Charlie argues that the capital budgeting figures show that the firm should acquire as many new boats as it possibly can, financing them with whatever means it finds available. You are Whitefish's CFO. Support or criticize Charlie's position. How should the appropriate number of new boats be determined? Does acquiring a large number of new boats present any problems or risks that aren't immediately apparent from the financial figures?

Reference no: EM13396387

Questions Cloud

What factors have contributed to changes in supply of and : identify a good or service with which you are familiar. what factors have contributed to changes in the supply of and

Recognize a least five prescription or over the counter : identify a least five prescription or over the counter drugs you may be familiar with at home or in your workplace.

The paper must also address how affirmative action policy : write a 700- to 1050-word paper recommending to a companys board of directors that affirmative action policies be

Find the definition of price elasticity of demand determine : what is the definition of price elasticity of demand? what is the relationship between price elasticity of demand and

Whitefish inc operates a fleet of 15 fishing boats in the : whitefish inc. operates a fleet of 15 fishing boats in the north atlantic ocean. fishing has been good in the last few

The human eye can be vulnerable to fungal infections just : the human eye can be vulnerable to fungal infections simply by being exposed to the environment. the human eye can also

Over the long run you expect dividends for bbc in problem 4 : 1.over the long run you expect dividends for bbc in problem 4 to grow at 8 percent and you require 11 percent on the

Elect a familiar organization and describe how each one of : 1. describe all four elements of the marketing mix product place price and promotion.2. select a familiar organization

What is a personal budget what are the necessary steps that : what is a personal budget? what are the necessary steps that one must follow in order to come up with a reliable

User Account

All Pages