Select a multinational Transportation company and evaluate it on the following Supply Chain Management criteria's:

Aligning Supply Chain Application Criteria:

1.Intensity of Involvement

2.Models for Developing and Implementing Successful Supply Chain Relationships.

3.Types of Collaborations

Supply Chain Performance Measurement Application Criteria:

1.Scope and Maintenance of Supply Chain Performance Measurement.

2.Various Methods to Measure Supply Chain Costs, Service, Profit and Revenue

3.Strategic Profit Model

Supply Chain Technology Application Criteria:

1.Integrated Supply Chain Information Systems

2.Critical Issues in Technology Selection and Implementation

3.Technological Innovations Influencing Supply Chain Management

Suppose you have been hired as a financial consultant to Defense Electronics, Inc. (DEI), a large, publicly traded firm that is the market share leader in radar detection systems (RDSs). The company is looking at setting up a manufacturing plant overseas to produce a new line of RDSs. This will be a five-year project. The company bought some land three years ago for $5.2 million in anticipation of using it as a toxic dump site for waste chemicals, but it built a piping system to safely discard the chemicals instead. The land was appraised last week for $6 million. In five years, the aftertax value of the land will be $6.4 million, but the company expects to keep the land for a future project. The company wants to build its new manufacturing plant on this land; the plant and equipment will cost $32.56 million to build. The following market data on DEI’s securities is current:

DEI uses G.M. Wharton as its lead underwriter. Wharton charges DEI spreads of 9 percent on new common stock issues, 7 percent on new preferred stock issues, and 5 percent on new debt issues. Wharton has included all direct and indirect issuance costs (along with its profit) in setting these spreads. Wharton has recommended to DEI that it raise the funds needed to build the plant by issuing new shares of common stock. DEI’s tax rate is 38 percent. The project requires $1,475,000 in initial net working capital investment to get operational. Assume Wharton raises all equity for new projects externally.

a. Calculate the project’s initial Time 0 cash flow, taking into account all side effects. Assume that the net working capital will not require flotation costs.

b. The new RDS project is somewhat riskier than a typical project for DEI, primarily because the plant is being located overseas. Management has told you to use an adjustment factor of +3 percent to account for this increased riskiness. Calculate the appropriate discount rate to use when evaluating DEI’s project.

c. The manufacturing plant has an eight-year tax life, and DEI uses straight-line depreciation. At the end of the project (that is, the end of Year 5), the plant and equipment can be scrapped for $5.2 million. What is the aftertax salvage value of this plant and equipment?

d. The company will incur $7,500,000 in annual fixed costs. The plan is to manufacture 20,500 RDSs per year and sell them at $11,150 per machine; the variable production costs are $9,750 per RDS. What is the annual operating cash flow (OCF) from this project?

e. DEI’s comptroller is primarily interested in the impact of DEI’s investments on the bottom line of reported accounting statements. What will you tell her is the accounting break-even quantity of RDSs sold for this project?

f. Finally, DEI’s president wants you to throw all your calculations, assumptions, and everything else into the report for the chief financial officer; all he wants to know is what the RDS project’s internal rate of return (IRR) and net present value (NPV) are. Assume that the net working capital will not require flotation costs.

Case: Please show your calculations and formulas used.

Suppose you have been hired as a financial consultant to Defense Electronics, Inc. (DEI), a large, publicly traded firm that is the market share leader in radar detection systems (RDSs). The company is looking at setting up a manufacturing plant overseas to produce a new line of RDSs. This will be a five-year project. The company bought some land three years ago for $4 million in anticipation of using it as a toxic dump site for waste chemicals, but it built a piping system to safely discard the chemicals instead. If the company sold the land today, it would receive $5.1 million after taxes. In five years, the land can be sold for $6.0 million after taxes, but DEI intends to keep the land for a future project. The company wants to build its new manufacturing plant on this land; the plant and equipment will cost $35 million to build. The following market data on DEI's securities are current:

Debt:     240,000 7.5 percent coupon bonds outstanding, 20 years to maturity, selling for 94 percent of par; the bonds have a $1,000 par value each and make semiannual payments.

Common stock: 9,000,000 shares outstanding, selling for $71 per share; the estimated beta is 1.2.

Preferred stock: 400,000 shares of 5.5 percent preferred stock outstanding, par value of $100 per share, selling for $81 per share.

Market: 8 percent expected market risk premium; 5 percent risk-free rate.

DEI uses G. M. Wharton as its lead underwriter. Wharton charges DEI spreads of 8 percent on new common equity (stock) issues, 6 percent on new preferred stock issues and 4 percent on new debt (bond) issues. Wharton has included all direct and indirect costs (along with its profit) in setting these spreads. In estimating DEI’s WACC, you should assume that DEI retains their existing capital structure weights for debt, common stock and preferred stock in order to finance the project. DEI's tax rate is 35 percent. The project requires $1,300,000 in initial net working capital (NWC) investment to get operational. Assume Wharton raises all financing for the new project, to include the amount needed for NWC, externally.

Questions:

1 - The manufacturing plant and equipment has an eight-year tax life, and DEI uses straight-line depreciation. At the end of the project (i.e., the end of Year 5), the plant and equipment can be sold for $6 million. Do not confuse the market value of the plant and equipment with the market value of the land. What is the after-tax salvage value of the equipment?

2 - The company will incur $7,000,000 in annual fixed costs. The plan is to manufacture 18,000 RDSs per year and sell them at $10,900 per machine; the variable production costs are $9,400 per RDS. What is the annual operating cash flow, OCF, from this project?

3 - DEI's comptroller is primarily interested in the impact of DEI's investments on the bottom line of reported accounting statements. What will you tell her are both the Accounting and Financial Break-Even quantity of RDSs sold for this project? For an understanding of Accounting and Financial Break-Even (Break-Even Point), “the break-even approach determines the sales needed to break even on the project investment – the point where the project generates no profits or loss.”

4 - What will be your estimate of NPV and IRR if the average RDS sales price per unit must be reduced by 5 percent (from $10,900 per unit to $10,355 per unit) in order to sell the 18,000 proposed units that are being manufactured? Will you still recommend the project?

This is a comprehensive project evaluation problem bringing together much of what you have learned in this and previous chapters. Suppose you have been hired as a financial consultant to Defense Electronics, Inc. (DEI), a large, publicly traded firm that is the market share leader in radar detection systems (RDSs). The company is looking at setting up a manufacturing plant overseas to produce a new line of RDSs. This will be a five-year project. The company bought some land three years ago for $7.5 million in anticipation of using it as a toxic dump site for waste chemicals, but it built a piping system to safely discard the chemicals instead. The land was appraised last week for $7.1 million. In five years, the aftertax value of the land will be $7.4 million, but the company expects to keep the land for a future project. The company wants to build its new manufacturing plant on this land; the plant and equipment will cost $45 million to build. The following market data on DEI's securities is current:

Debt: 280,000 6.4 percent coupon bonds outstanding, 25 years to maturity, selling for 103 percent of par; the bonds have a $1,000 par value each and make semiannual payments.

Common stock: 9,800,000 shares outstanding, selling for $73 per share; the beta is 1.20.

Preferred stock: 450,000 shares of 5.10 percent preferred stock outstanding, selling for $87 per share and having a par value of $100. Market: 7.5 percent expected market risk premium; 3.2 percent risk-free rate.

DEI uses G.M. Wharton as its lead underwriter. Wharton charges DEI spreads of 6.5 percent on new common stock issues, 4.5 percent on new preferred stock issues, and 3 percent on new debt issues. Wharton has included all direct and indirect issuance costs (along with its profit) in setting these spreads. Wharton has recommended to DEI that it raise the funds needed to build the plant by issuing new shares of common stock. DEI's tax rate is 35 percent. The project requires $1,400,000 in initial net working capital investment to get operational. Assume Wharton raises all equity for new projects externally.

a. Calculate the project's initial Time 0 cash flow, taking into account all side effects.

b. The new RDS project is somewhat riskier than a typical project for DEI, primarily because the plant is being located overseas. Management has told you to use an adjustment factor of +2 percent to account for this increased riskiness. Calculate the appropriate discount rate to use when evaluating DEI's project.

c. The manufacturing plant has an eight-year tax life, and DEI uses straight-line depreciation. At the end of the project (that is, the end of Year 5), the plant and equipment can be scrapped for $8.5 million. What is the aftertax salvage value of this plant and equipment?

d. The company will incur $8,100,000 in annual fixed costs. The plan is to manufacture 18,000 RDSs per year and sell them at $12,900 per machine; the variable production costs are $11,250 per RDS. What is the annual operating cash flow (OCF) from this project?

e. DEI's comptroller is primarily interested in the impact of DEI's investments on the bottom line of reported accounting statements. What will you tell her is the accounting break-even quantity of RDSs sold for this project?

f. Finally, DEI's president wants you to throw all your calculations, assumptions, and everything else into the report for the chief financial officer; all he wants to know is what the RDS project's internal rate of return (IRR) and net present value (NPV) are. What will you report?

Suppose you have been hired as a financial consultant to Defense Electronics, Inc. (DEI), a large, publicly traded firm that is the market share leader in radar detection systems (RDSs). The company is looking at setting up a manufacturing plant overseas to produce a new line of RDSs. This will be a five-year project. The company bought some land three years ago for $5 million in anticipation of using it as a toxic dump site for waste chemicals, but it built a piping system to safely discard the chemicals instead. The land was appraised last week for $5.8 million. In five years, the aftertax value of the land will be $6.2 million, but the company expects to keep the land for a future project. The company wants to build its new manufacturing plant on this land; the plant and equipment will cost $32.4 million to build. The following market data on DEI’s securities is current:

DEI uses G.M. Wharton as its lead underwriter. Wharton charges DEI spreads of 7 percent on new common stock issues, 5 percent on new preferred stock issues, and 3 percent on new debt issues. Wharton has included all direct and indirect issuance costs (along with its profit) in setting these spreads. Wharton has recommended to DEI that it raise the funds needed to build the plant by issuing new shares of common stock. DEI’s tax rate is 40 percent. The project requires $1,425,000 in initial net working capital investment to get operational. Assume Wharton raises all equity for new projects externally.

A. Calculate the projects initial time 0 cash flow, taking into account all side effects . Assume that the net working capital will not require flotation costs.

Cash flow $___________

B. The new RDS project is somewhat riskier than a typical project for DEI, primarly because the plant is being located overseas. Management has told you to use an adjustment factor of +1 to account for this increased riskiness. Calculate the appropriate discount rate to evaluate DEIs project.

Discount rate ________%

C. The manufacturing plant has an 8-year tax life, and DEI uses straight line depreciation. At the end of the project (that is, the end of year 5) the plant and equipment can be scrapped for $5 million. What is the aftertax salvage value of this plant and equipment?

Aftertax salvage value $________

D. The company will incur $7,300,000 in annual fixed costs. The plan is to manufacture $19,500 RDSs per year and sell them at $11,050 per machine; The variable production costs are $9,650 per RDS. What is the annual operating cash flow from this project?

Operating cash flow $_________

E. DEIs comptroller is primarily interested in the impact of DEIs investment on the bottom line of reporting accounting statements. What will you tell her is the accounting break even quantity if RDSs sold for this project?

Break-even quantity _________units

F. Finally DEI's president wants you to throw all your calculations, assumptions, and everything else into the report for the chief financial officer; all he wants to know is what the RDS projects internal rate of return (IRR) and net present value (NPV) are. Assume that the net working capital will not require flotation costs.

IRR _________%

NPV $________

Suppose you have been hired as a financial consultant to Defense Electronics, Inc. (DEI), a large, publicly traded firm that is the market share leader in radar detection systems (RDSs). The company is looking at setting up a manufacturing plant overseas to produce a new line of RDSs. This will be a five-year project. The company bought some land three years ago for $5 million in anticipation of using it as a toxic dump site for waste chemicals, but it built a piping system to safely discard the chemicals instead. The land was appraised last week for $5.8 million. In five years, the aftertax value of the land will be $6.2 million, but the company expects to keep the land for a future project. The company wants to build its new manufacturing plant on this land; the plant and equipment will cost $32.4 million to build. The following market data on DEI’s securities is current:

Debt: 235,000 7 percent coupon bonds outstanding, 25 years to maturity, selling for 107 percent of par; the bonds have a $1,000 par value each and make semiannual payments.

Common stock: 9,300,000 shares outstanding, selling for $71.50 per share; the beta is 1.3.

Preferred stock: 455,000 shares of 4 percent preferred stock outstanding, selling for $81.50 per share and and having a par value of $100.

Market: 6 percent expected market risk premium; 4 percent risk-free rate.

DEI uses G.M. Wharton as its lead underwriter. Wharton charges DEI spreads of 7 percent on new common stock issues, 5 percent on new preferred stock issues, and 3 percent on new debt issues. Wharton has included all direct and indirect issuance costs (along with its profit) in setting these spreads. Wharton has recommended to DEI that it raise the funds needed to build the plant by issuing new shares of common stock. DEI’s tax rate is 40 percent. The project requires $1,425,000 in initial net working capital investment to get operational. Assume Wharton raises all equity for new projects externally.

A. Calculate the project’s initial Time 0 cash flow, taking into account all side effects. Assume that the net working capital will not require flotation costs. Cash flow ___

B. The new RDS project is somewhat riskier than a typical project for DEI, primarily because the plant is being located overseas. Management has told you to use an adjustment factor of +1 percent to account for this increased riskiness. Calculate the appropriate discount rate to use when evaluating DEI’s project. Discount rate _____

C. The manufacturing plant has an eight-year tax life, and DEI uses straight-line depreciation. At the end of the project (that is, the end of Year 5), the plant and equipment can be scrapped for $5 million. What is the aftertax salvage value of this plant and equipment? Aftertax salvage value ____

D. The company will incur $7,300,000 in annual fixed costs. The plan is to manufacture 19,500 RDSs per year and sell them at $11,050 per machine; the variable production costs are $9,650 per RDS. What is the annual operating cash flow (OCF) from this project? Operating cash flow _____

E. DEI’s comptroller is primarily interested in the impact of DEI’s investments on the bottom line of reported accounting statements. What will you tell her is the accounting break-even quantity of RDSs sold for this project? Break-even quantity units ______

F. Finally, DEI’s president wants you to throw all your calculations, assumptions, and everything else into the report for the chief financial officer; all he wants to know is what the RDS project’s internal rate of return (IRR) and net present value (NPV) are. Assume that the net working capital will not require flotation costs.

IRR %

NPV $

DOVERCOURT a non-profit organization has paid a researcher to use SPSS and analyze some data they have collected from the month of October 2016. These data include the following variables as presented in the table below.

Number of adults members who participate in the Dovercourt activities

• Age is in average years for a specific hour
• The number of participants represents a monthly average.

Question:

Enter the data in the SPSS spreadsheet and then briefly answer the following question, taking about half a page for question (including output).

• Use a box plot to describe the number of total participants. Explain what it shows.

On Jan. first, 2018, Snuff Company accepts 60000 non-interest bearing note from a customer for the sale of goods. The note is to be paid in 3 equal installments every Dec. 31st (first payment on Dec. 31, 2018). An assumed interest rate of 10% is implied. Round installment payments to the nearest dollar.

pt 1: Determine the PV of the note. Show all computations or calculator imputs.

pt 2: Prepare an amortization table in Excell to show the revenue recognized each year

pt 3: Prepare the journal entries for the dates listed below.

jan 1, 2018

Dec 31,2018

Dec 31, 2019

Required information

Daytona Company operates three divisions, L, M, and Z. The following
information is available for the most recent month:

Daytona Company:
Variable costs .............    $281,000
Common fixed costs .........    $ 92,000
Net income .................    $136,000

Division L:
Traceable fixed costs ......    $ 28,000

Division M:
Sales revenue ..............    $190,000
Contribution margin ........    $ 57,000
Segment margin .............    $ 46,000

Division Z:
Variable costs .............    $ 92,000
Variable costs .............    40% of sales
Segment margin .............    $106,000

Calculate the sales revenue reported by Division L during the most
recent month.