Bus 401 – Principles of Finance – Final ProjectEssay Preview: Bus 401 – Principles of Finance – Final ProjectReport this essaySince it has been two months since the new Assistant Financial Analyst has taken the position with Caldeonia Products Company, the supervisor has been pleased with the Analyst work thus far. He would like to give additional responsibilities that will require no supervision but he is a bit hesitant. Therefore he assigns a project that will be able to prove if the new employee is ready for more responsibilities without any supervision. We will walk through each task, given the data provided, and provide a detail response. Upon completion of this task, we would hope that the supervisor is well pleased with the final project, therefore giving the Analyst a chance to advance within the company.
This blog post will help us get a feel for the new Assistant Director of CineWorks, who has some insights for the future of CineWorks.
At Co. Ltd., we make many changes every day, such as opening the company up to a competitive service provider or getting started in the food industry. We feel like we put an extraordinary emphasis on delivering products to the customers and doing our part to give them the best possible experience. From where we are now we plan to expand the range of products we offer in every corner of the country that supports our business. We are aware that the technology is so strong, and so important to our business, that we need a greater sense of scale to ensure we can continue growing and expand to more markets. The recent release of the company’s new Food Safety and Inspection Service (FSIS) regulations and the recent improvements to our product offerings, make it clear to all of us that we need a new Assistant Director to help us deliver the best possible business experience.
For the past five years a major difference between our business and our customers’ views of our products was a sense that we need good products, not good products that consumers are more than willing to spend money on. Even then, we didn’t want to overpay for products that are actually being manufactured. Our new Assistant Director wants to make sure these are good products that consumers want to buy for a decent price. Although a lot of us like our organic food products, we think we need good organic ones.
I believe that the biggest challenge for the US is to do more for our customers. The big companies do not give their customers the opportunity to save. That is what’s coming to consume the American food we love and serve. And the big companies are doing everything they can to make that happen.
The US now has more consumers of organic food that are willing to spend money on food in bulk, including organic and less expensive options such as organic salad or organic soy. But they also have better products that we can sell at a lower price or through a small-scale, online storefront. In some instances, the more people that purchase organic food, the cheaper it is to buy groceries from our online shop. This is because organic food is an extremely safe food when tested on food safety standards and is far safer than other food available through our wholesalers.
[ The following has been developed pursuant to a consultation with the US Department of Agriculture. The author has not indicated how the process is being carried out.]
As your C.E.O, you represent the leadership team of the US Department of Agriculture. In addition to the Assistant Financial Analyst, you provide information, expertise, and experience for the Bureau of Labor Statistics (BLS) on economic and business growth and for their activities in the supply chain.
As head of the US Bureau of Labor Statistics, your role has been critical in ensuring that a wide range of agencies, industries, and individuals will continue and benefit from my new position as Assistant Senior Analyst. This includes my responsibilities in ensuring that the Federal Reserve and the Department of Commerce (DO
A. Should Caledonia focus on cash flows or accounting profits in making its capital-budgeting decisions? Should the company be interested in incremental cash flows, incremental profits, total free cash flows, or total profits?
Caledonia would benefit if they would concentrate on the cash flow because rather than the accounting profits. The incremental cash flow is definitely something the company should be interested. Canvassing the project shows us that the marginal benefit from the project with increased value to the company because they accepted the project. Reason being because the company can reinvest which a wonderful opportunity is for any company. Now looking at the cash flow an analysis can be made to accurately review the timing of the benefit. Again it would benefit the company to look upon the cash flow after-tax basis which is available to shareholders.
B. How does depreciation affect free cash flows?Depreciation affects free cash flows because of its effects on taxes. The accounting profits is lowered which in turn, the taxes become a cash flow item. Depreciation is an expense meaning the more that the depreciation has incurred, then the expenses begin to grow larger.
C. How do sunk costs affect the determination of cash flows?Considering the data provided for this case, we must evaluate the capital budget proposal which ignores the sunk costs. Something the company should be interested with is the incremental after-tax cash flows which would benefit the company as a whole. At this point it will not make a difference with the investment because the sunk cost will have occurred which means these are not the incremental cash flow.
Parts D,E & F ( Also see attached Excel Spreadsheet)Units Sold70,000120,000140,00080,00060,000Sale Price$300$300$300$300$260Sales Revenue$21,000,000$36,000,000$42,000,000$24,000,000$15,600,000Less: Variable Costs12,600,00021,600,00025,200,00014,400,00010,800,000Less: Fixed Costs$200,000$200,000$200,000$200,000$200,000Equals: EBDIT$8,200,000$14,200,000$16,600,000$9,400,000$4,600,000Less: Depreciation$1,600,000$1,600,0000$1,600,0000$1,600,0000$1,600,0000Equals: EBIT$6,600,000$12,600,000$15,000,000$7,800,000$3,000,000Taxes (@34%)$2,244,000$4,284,000$5,100,000$2,652,000$1,020,000Operating Cash Flow:$6,600,000$12,600,000$15,000,000$7,800,000$3,000,000Minus: Taxes$2,244,000$4,284,000$5,100,000$2,652,000$1,020,000Plus: Depreciation$1,600,000$1,600,000$1,600,000$1,600,000$1,600,000Equals: Operating Cash Flow$5,956,000$9,916,000$11,500,000$6,748,000$3,580,000Change In Net Working Capital:Revenue:$21,000,000$36,000,000$42,000,000$24,000,000$15,600,000Initial Working Capital Requirement$100,000Net Working Capital Needs:$2,100,000$3,600,000$4,200,000$2,400,000$1,560,000Liquidation of Working Capital$1,560,000