The Investment Detective Case

In the Super Project case, Crosby set out to argue that the current methodologies being utilized by General Foods Corporation to determine which capital investments to pursue did not always fit the bill. Crosby advocated using alternative methods for evaluation of Super including: 1) Incremental Basis, 2) Facilities Used Basis, and 3) Fully Allocated Basis. He provided the Corporate Budgets and Analysis management team with documentation that articulated each of the methods he used, the results obtained, discussion points, and ultimately his conclusions. As can be seen from the illustration below, each alternative provided vastly different outcomes, thus begging the question – which method should General Foods use?

Finally, in order to complete a more accurate comparison between the two projects, we utilized the EANPV as the deciding factor. Under current accepted financial practice, NPV is generally considered the most accurate method of predicting the performance of a potential project. The duration of the projects is different, one lasts four years and one lasts six years. To account for the variation in time frames for the projects and to further refine our selection we calculated the EANPV to compare performance on a yearly basis.

Evaluating the risks, calculating the probability of success, and factoring in the projected profit from sales will provide a clearer NPV to be compared with other projects in the

Star Appliance is looking to expand their product line and is considering three different projects: dishwashers, garbage disposals, and trash compactors. We want to determine which project would be worth doing by determining if they will add value to Star. Thus, the project(s) that will add the most value to Star Appliance will be worth pursuing. The current hurdle rate of 10% should be re-evaluated by finding the weighted average cost of capital (WACC). Then by forecasting the cash flows of each project and discounting them by the WACC to find the net present value, or by solving for the internal rate of return, we should be able to see which projects Star should undertake.

I believe Company O is the second Paragraph, which is Lee Enterprises. Intangibles make up a large percentage of total assets, which would explain the significant amount of goodwill. The company also has low SG&A expenses which is probably because of its decentralization policy. I believe paragraph one is Company P, which is the New York Times. The companies’ high SG&A expenses are indicative of how it’s a diversified media company and does business around the world.

This case set contains information for two separate companies in eight different industries. Our task is to differentiate the companies based on what we know about them from a qualitative stand point and the financial data that we are provided.

Project Free Cash Flows (dollars in thousands) Project number: 1 2 3 4 5 6 7 8 Initial investment (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) Year 1 $ 330 $ 1,666 $ 160 $ 280 $ 2,200 $ 1,200 $ (350) 2 330 334 200 280 900 (60) 3 330 165 350 280 300 60 4 330 395 280 90 350 5 330 432 280 70 700 6 330 440 280 1,200 7 330 442 280

This case study analyzed five different projects Target Corporation had to decide on capital spent for which project created the most value and the most growth for the company and its shareholders. By analyzing the financial statements and exhibits of each project, I was able to determine the positives and negatives of each of these alternatives. The alternatives were Gopher Place, Whalen Court, The Barn, Goldie’s Square, or Stadium Remodel.

Financial characteristics of companies vary for many reasons. The two most prominent drivers are industry economics and firm strategy. Each industry has a financial norm around which companies within the industry tend to operate. Each company within industries has different financial characteristics and strategies which can produce striking differences in financial results for firms in the same industry.

All the projects will be undertaken except for project 7 since it is mutually exclusive with project 8, and project 6 and 2 will not be undertaken since they have 0 and negative value.

Financial characteristics of companies vary both from industry to industry and within a single industry for a variety of reasons.   The challenge for any company in planning its strategy is the consideration of the industry’s economics in conjunction with their own strategy to help the company’s financial statements remain strong and competitive across both lines.   In this case, we are asked to use this consideration of strategies to determine which company description belongs to which company’s financial statements.   And explain the differences in the financial results across industries.

Most organizations are faced with the problem of allocation of resources that are most often limited across the projects within the organizations. Before any allocations are made there are various propositions that are made within the organization by individuals or organizational units who are the proponents of the projects due to the fact that resources are limited there is need to select particular projects which will be considered first this is what is termed as prioritization of projects. Before these decisions are made there are various factors that need to be considered. In order for the organizations to be sure on the projects to capitalize their funds on, they are required to prioritize the projects that have been proposed. This is a difficult process since the evaluation of specific projects often requires detailed technical knowledge This paper will therefore look at the various data collection tools and methods used by an organization when evaluation and prioritizing projects.

This paper covers the implementation of three investment appraisal methods. Initially, importance of investment appraisal has been analyzed. Secondly, calculations have been done for

This report will firstly evaluate the usefulness and limitations of the two investment appraisal methods, including the Payback and Net Present Value (NPV). Secondly the report will review historical financial information. Thirdly discuss the financial issues of debt and equity. Finally the report will provide recommendations of how the company’s investment should be finance.

Interest is the amount charged on money credited. This amount is a percentage of the principal borrowed and is computed periodically, often annually. Interest offered by banks and financial institutions is either simple or compound. Simple interest is a percentage of the principal calculated on an annual basis. Compound is the percentage on the principal and previous interests added to the principal, and are calculated annually. Given that there are different types of income like interest income, leasing, rental, and royalty income interest will have different definitions depending on the type of income it is being calculated on.