Description
The team works for a company that is looking to make an acquisition of another company. The team must make a recommendation as to whether or not the company should make an offer based on the information below. The team must present their recommendation and all supporting information to the executive team.
Select a company (General Electric) with which the team is familiar. This should be a publicly traded company with sufficient financial data available online.
Identify the following information on the selected company:
- Revenues = increasing by 8% each year
- Expenses = increasing by 10% each year
- Tax rate = 25%
- Discount rate = 10%
Part I
Compute and analyze the financial data using a Microsoft® Excel® spreadsheet. Make sure all calculations can be seen in the background of the applicable spreadsheet cells. In other words, leave an audit trail so others can see how you arrived at your calculations and analysis. Items should be submitted in Microsoft® Excel®; indicate your recommendation in the Microsoft® Excel® spreadsheet:
- Calculate the 5-year projected income.
- Calculate a 5-year projected cash flow.
- Calculate net present value (NPV).
- Calculate the internal rate of return (IRR).
- Determine if the team would recommend acquiring this company based on the 4 calculations above; do you recommend acquiring this company?
Identify a quantifiable measure for the company such as service time, percent of errors, etc. Select one of the following quality control tools to evaluate this data:
- Flow chart
- Cause and Effect (Fishbone) Diagram
- Pareto Chart
- Control Charts
- Histograms
- Scatter Diagrams
Explanation & Answer
Good luck in your study and if you need any further help in your assignments, please let me know Can you please confirm if you have received the work? Once again, thanks for allowing me to help you R MESSAGE TO STUDYPOOL NO OUTLINE IS NEEDED AS IT IS A
2015
Sales
117,386,000
cost of good
85,298,000
GP
32,088,000
Operating expe.
20,439,000
Operating income
11,649,000
Interest expenses
516,000
net income before tax 11,133,000
1,700,000
Income from continuing operations
-6,126,000
dicontinued operations
net income
17259000
Year
Net Income
2017
136919030.4
103210580
2018
147872553
113531638
32,949,080
33,708,450
34,340,915
22482900
24731190
27204309
10466180
8977260
7136606
567600
624360
686796
9898580
8352900
6449810
1870000
0
2057000
2262700
0
8352900
0
6449810
9898580
2015
$
2016
126776880
93827800
2016
17,259,000
$
9,898,580
2017
$
8,352,900
Total loss over 5 year period $
8,541,553
Percent decrease Year over Year
Total percentage loss over 5 year period
NPV
IRR
2018
$
6,449,810
-42.65%
86%
$37,886,577.84
0%
Accroding to NPV, the company is worth investing in since it has a positive NPV
According to IRR, the value is less than the discount rate hance the company is not viable for investment
2019
159702357
124884802
2020
172478546
137373282
34,817,555
35,105,264
29924740
32917214
4892815
2188050
755476
831023
4137340
1357027
2488970
2737867
0
4137340
0
1357027
2019
$
able for investment
4,137,340
2020
$
1,357,027
Revenue - Cost of goods = GP
GP- operating expenses...