Managerial Finance (IP)

Jan 14th, 2015
SoccerBoss
Category:
Business & Finance
Price: $25 USD

Question description


Deliverable Length: 500 words, grammatically correct and plagiarism free. 

The Apix Printing Inc. board of directors has recently completed its multiyear strategic plan. The chief executive officer (CEO), John Matthews, and the vice president (VP) of sales and administration, James Simeon, meet with you and Mary Francis to discuss it. Included in the plan is an intent to diversify Apix’s current product line to include food packaging. Additional investment is required for this expansion, and equipment and inventory will need to be procured and placed in service.

As the VP of Finance, you will soon need certain information for computing the net present value (NPV) and the internal rate of return (IRR) for Apix’s expansion project. The calculations will be presented to the board at the next quarterly meeting for approval. Today, you are meeting with CEO John Matthews and Luke Stewart, VP of production and supply chain to discuss the information.

Luke is excited about the prospect of going into another line of business, and he says, “I know our employees will be eager to learn new processes if it means long-term job security and profitability for the company.”

“Everyone will benefit if we are able to implement the project,” says John. “So, to gather enough capital, we must present an appealing prospectus to shareholders and bondholders. Naturally, investors want some assurance that their investment will yield returns; and it’s up to us to properly assess our project given the cost of capital.”

You nod in agreement and say, “We need everyone in the organization to have an appreciation for these calculations and the information that goes into them. These estimates are important because the board’s approval will allow the company to diversify into the food packaging business.”

Luke holds out both hands and says, “You know, my understanding is somewhat basic on the two theoretical approaches you’ve talked about. Let’s go over some of the basics now so my grasp of the financial end of this is clearer.”

“Good idea, Luke,” you say. “I’ll prepare brief definitions of the project financial valuation methodologies NPV and IRR.”

You also need to explain the following to Luke:

  • How the application of weighted average cost of capital (WACC) would be applied to each method
  • How companies assess the feasibility of a project according to these valuation methodologies

“That would be a big help,” says Luke. “Thanks.”

“Once you get my explanations, you’ll be able to explain it to others,” you say.


Tutor Answer

(Top Tutor) Daniel C.
(997)
School: New York University
PREMIUM TUTOR

Studypool has helped 1,244,100 students

8 Reviews


Summary
Quality
Communication
On Time
Value
tinytim47
Dec 6th, 2016
" Wow this is really good.... didn't expect it. Sweet!!!! "
Five Star Tutor
Nov 23rd, 2016
" Outstanding Job!!!! "
mixedballz
Nov 23rd, 2016
" excellent work as always thanks for the help "
lilmoe415
Nov 14th, 2016
" Thank you, Thank you, for top quality work, this is your guy!! "
darnay
Oct 31st, 2016
" The best tutor out there!!!! "
dontuwannaknow
Oct 22nd, 2016
" Excellent work as always thanks so much "
SjSurvivor143
Oct 9th, 2016
" Thanks for the help. "
Joemoe
Sep 25th, 2016
" <3 it, thanks for saving me time. "
Ask your homework questions. Receive quality answers!

Type your question here (or upload an image)

1831 tutors are online

Brown University





1271 Tutors

California Institute of Technology




2131 Tutors

Carnegie Mellon University




982 Tutors

Columbia University





1256 Tutors

Dartmouth University





2113 Tutors

Emory University





2279 Tutors

Harvard University





599 Tutors

Massachusetts Institute of Technology



2319 Tutors

New York University





1645 Tutors

Notre Dam University





1911 Tutors

Oklahoma University





2122 Tutors

Pennsylvania State University





932 Tutors

Princeton University





1211 Tutors

Stanford University





983 Tutors

University of California





1282 Tutors

Oxford University





123 Tutors

Yale University





2325 Tutors