Mini Case:
Maya Lee and John Spencer are facing an important decision. After having discussed different financial scenarios into the wee hours of the morning, the two computer engineers felt it was time to finalize their cash flow projections and move to the next stage – decide which of two possible projects they should undertake.
Both had a bachelor degree in engineering and had put in several years as maintenance engineers in a large chip manufacturing company. About six months ago, they were able to exercise their first stock options. That was when they decided to quit their safe, steady job and pursue their dreams of starting a venture of their own. In their spare time, almost as a hobby, they had been collaborating on some research into a new chip that could speed up certain specialized tasks by as much as 25%. At this point, the design of the chip was complete. While further experimentation might improve the performance of their design, any delay in entering the market now may prove to be costly, as one of the established players might introduce a similar product of their own. The duo knew that now was the time to act if at all.
They estimated that they would need to spend about $2,500,000 on plant, equipment and supplies. As for future cash flows, they felt that the right strategy at least for the first year would be to sell their product at dirt-cheap prices in order to induce customer acceptance. Then, once the product had established a name for itself, the price could be raised. By the end of the fifth year, their product in its current form was likely to be obsolete. However, the innovative approach that they had devised and patented could be sold to a larger chip manufacturer for a decent sum. Accordingly, the two budding entrepreneurs estimated the cash flows for this project (call it Project A) as follows:
Year
Project A
Expected Cash flows ($)
0
($2,500,000)
1
$290,000
2
$400,000
3
$880,000
4
$1,600,000
5
$1,600,000
An alternative to pursuing this project would be to immediately sell the patent for their innovative chip design to one of the established chip makers. They estimated that they would receive around $200,000 for this. It would probably not be reasonable to expect much more as neither their product nor their innovative approach had a track record.
They could then invest in some plant and equipment that would test silicon wafers for zircon content before the wafers were used to make chips. Too much zircon would affect the long-term performance of the chips. The task of checking the level of zircon was currently being performed by chip makers themselves. However, many of them, especially the smaller ones, did not have the capacity to permit 100% checking. Most tested only a sample of the wafers they received.
Maya and John were confident that they could persuade at least some of the chip makers to outsource this function to them. By exclusively specializing in this task, their little company would be able to slash costs by more than half, and thus allow the chip manufacturers to go in for 100% quality check for roughly the same cost as what they were incurring for a partial quality check today. The life of this project too (call it project B) is expected to be only about five years.
The initial investment for this project is estimated at $ 2,600,000. After taking into account the sale of their patent, the net investment would be $2,400,000. As for the future, Maya and John were reasonably sure that there would be sizable profits in the first couple of years. But thereafter, the zircon content problem would slowly start to disappear with advancing technology in the wafer industry. Keeping all this in mind, they estimate the cash flows for this project as follows:
Year
Project B
Expected Cash flows ($)
0
($2,400,000)
1
$1,450,000
2
$1,215,000
3
$470,000
4
$285,000
5
$165,000
Maya and John now need to make their decision. For purposes of analysis, they plan to use a required rate of return of 15% for both projects. Ideally, they would prefer that the project they choose have a payback period of less than 4 years and a discounted payback period of less than 5 years.
Below are the results of the analysis they have carried out so far:
Metrics
Project A
Project B
Payback period (in years)
3.58
1.78
Discounted payback period (in years)
4.57
2.71
Net Present Value (NPV)
$343,534
$333,601
Internal Rate of Return (IRR)
19.22%
23.50%
Profitability Index
1.1374
1.1390
Modified Internal Rate of Return (MIRR)
18.00%
18.03%
One of the concerns that Maya and John have is regarding the reliability of their cash flow estimates. All the analysis in the table above is based on “expected” cash flows. However, they are both aware that actual future cash flows may be higher or lower.
Assignment:
Suppose that Maya and John have hired you as a consultant to help them make the decision. Please draft an official memo to them with your analysis and recommendations.
Your submission should cover the following questions:
- Briefly, summarize the key facts of the case and identify the problem being faced by our two budding entrepreneurs. In other words, what is the decision that they need to make? (10 points)
An excellent paper will demonstrate the ability to construct a clear and insightful problem statement while identifying all underlying issues.
- What are some approaches that can be used to solve this problem? What are some various criteria or metrics that can be used to help make this decision? (10 points)
An excellent paper will propose solutions that are sensitive to all the identified issues.
- a) Rank the projects based on each of the following metrics: Payback period, Discounted payback period, NPV, IRR, Profitability Index, and MIRR. (10 points)
b) John believes that the best approach to make the decision is the NPV approach. However, Maya is not so sure that ignoring the other metrics is a good idea. Which of the approaches or metrics would you propose? In other words, would you prefer one or more of these approaches over the others? Explain why. (20 points)
An excellent paper will include an evaluation of solutions containing thorough and insightful explanations, feasibility of solutions, and impacts of solutions.
- a) Which of these projects would you recommend? Explain why. (10 points)
b) Briefly state the limitations of the approach you used in making this decision, and outline what further analysis you would recommend. (20 points)
An excellent paper will provide concise yet thorough action-oriented recommendations using appropriate subject-matter justifications related to the problem while addressing limitations of the solution and outlining recommended future analysis.
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Mindy Feldkamp And Her Two Colleagues Oscar Lopez And Lori Melton Are Personal T
/in Uncategorized /by developerMindy Feldkamp and her two colleagues, Oscar Lopez and Lori Melton, are personal trainers at an upscale health spa/resort in Tampa, Florida. They want to start a health club that specializes in health plans for people in the 50+ age range. The growing population in this age range and strong consumer interest in the health benefits of physical activity have convinced them they can profitably operate their own club. In addition to many other decisions, they need to determine what type of business organization they want. Oscar believes there are more advantages to the corporate form than a partnership, but he hasn’t yet convinced Mindy and Lori. They have come to you, a small business consulting specialist, seeking information and advice regarding the choice of starting a partnership versus a corporation
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Minecraft Fueling Creative Ideas Analytical Thinking In K 12 Classrooms Educator
/in Uncategorized /by developerGamification” Please respond to the following:
Reflective Questions:
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Mineral In The Earth Geology Homework Help
/in Uncategorized /by developerInstructions: Choose the best answer for the following questions.
Question 1
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The silicates are the most common minerals in the Earth.
Select one:a. True
b. False
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What is a silicon-oxygen tetrahedron?
Select one:a. An oxygen surrounded by four silicon
b. A silicon surrounded by four oxygen
c. A silicon surrounded by two oxygen
d. An oxygen that can have a random amount of silicon attaching to it.
Question 3
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What is a single-chain silicate?
Select one:a. Silicon-oxygen tetrahedrons that are connected in a chain due to oxygen bonding to other oxygen.
b. Silicon-oxygen tetrahedrons that are connected in a chain because they are sharing oxygen.
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Part II – Silicate Structures
Below are two silicate structures. Figure 1 is a single silicon oxygen tetrahedron. Figure 2 is a single chain silicate showing the tetrahedrons are sharing oxygen atoms in their structure to create a chain. Using these two images, answer the questions below.
[img width=”125″ height=”122″ alt=”tetra5″ src=”https://ilearn.sfsu.edu/ay1617/pluginfile.php/125818/question/questiontext/132931/5/27194/tetra5.jpg”>
FIGURE 1
[img width=”216″ height=”587″ alt=”tetra6″ src=”https://ilearn.sfsu.edu/ay1617/pluginfile.php/125818/question/questiontext/132931/5/27194/tetra6.jpg”> FIGURE 2
Question 4
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Why are there more silicon relative to oxygen in Figure 2?
Select one:a. Figure 2 has more oxygen than figure 1
b. There are more silicon atoms in Figure 2 than in Figure 1
c. Polymerization has occurred in Figure 2, where the oxygen are being shared between tetrahedrons
d. In Figure 1, the oxygen are sharing with surrounding tetrahedrons
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Print out the two figures above onto a piece of paper. Draw an S on the oxygen that are being shared in the structure(s) above. Then draw a black dot onto the oxygen that are not being shared to represent the iron atom attaching to that oxygen. Once you have finished this, answer the following questions. (Note: when looking at the single chain, please note that there is an oxygen sitting on top of the silicon in addition to the three other oxygen next to the silicon.)
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How many iron cations were you able to draw in for the single silicon-oxygen tetrahedron (Figure 1)?
Select one:a. One
b. Two
c. Three
d. Four
e. Five
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What mineral does Figure 1 represent?
Select one:a. Quartz
b. Muscovite
c. Pyroxene
d. Olivine
e. Plagioclase Feldspar
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Look at Figure 2. How many iron cations were you able to draw in for each silicon-oxygen tetrahedron (not the entire chain)? Choose a silicon-oxygen tetrahedron that is sitting in the middle of the chain, not the ends.
Select one:a. One
b. Two
c. Three
d. Four
e. Five
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What mineral does Figure 2 represent?
Select one:a. Quartz
b. Muscovite
c. Pyroxene
d. Olivine
e. Plagioclase Feldspar
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Which of the following minerals from the choices below share all oxygen in the silicate structure.
Select one:a. Quartz
b. Muscovite
c. Hornblende
d. Olivine
e. Pyroxene
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Minerals Assignment Provide 3 Short Par
/in Uncategorized /by developerMinerals________________________________________Assignment:Provide 3 short paragraphs, of about 80 words each, where in your own words you will make a statement about the following points:1. Overall, the physical properties of minerals provide a reliable means to identify common minerals. However, certain properties can exhibit a range of characteristics or values making them less useful for identification purposes. Choose three physical properties that might vary considerably between samples of the same mineral and explain why such variability might exist.2. Using the information from Table 2.1 in the text, identify five different materials that you encounter or use on a daily basis and give a possible mineral that could be mined to supply those materials. Can you think of any other considerations other than economic that might prohibit or limit the mining of certain minerals?3. Why are most rock-forming minerals silicates? Also, considering the composition of Earth’s crust, do all of the nonsilicate mineral groups make sense chemically? Why or why not?________________________________________Requirements: Use spelling check before you submit the results.Please list references. ________________________________________________________________________________
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Mini Case 2 Instructions Fill In The Blanks At The End Of Its First Year O
/in Uncategorized /by developerMINI CASE #2Instructions: Fill in the blanks _____. Use this mini case to help you studyKids-At-Play is a toy store that began operations this year. At the end of its first year of operations, Kids-At-Play had accounts receivable totaling $50,000. The store’s manager estimates that $1,500 of those receivables will not be collected.Journal entry to record uncollectible accounts at the end of the year:
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Mini Case 3 Capital Markets Comparing Weighted Average Returns Versus Money Mark
/in Uncategorized /by developerMini-Case #3
Capital Markets, Comparing Weighted Average Returns Versus Money Markets
CONCEPTS IN THIS CASE:
capital markets capital structure primary market secondary market initial public offering (IPO) NASDAQ
In Chapter 9 you invested your inheritance in the money market for one year; you are now prepared to make a commitment to longer-term instruments. To make the best-informed decision, you have started to study the capital markets alternatives in the United States.
You begin your analysis by defining the following terms (include risk and return factors where appropriate):
Capital markets
NYSE
AMEX
OTC
NASDAQ
Bonds
Stocks
Mortgages
Strips
Agency bonds
Municipal bonds
Corporate bonds
Call and sinking fund provisions
Junk bonds
Common stock
Preferred stock
Investment bankers and underwriting
General obligation municipal bonds
Revenue bonds
Your inheritance has grown to $1.2 million, and you are prepared to make long-term investment decisions. After considering the alternatives in the capital markets, you decide to divide the funds equally among the following financial instruments: U.S. Treasury notes (2-year maturity), U.S. Treasury bonds (20-year maturity), Ginnie Mae (10-year maturity), municipal bonds from your state (10-year maturity), corporate bonds from your company (nonconvertible 20-year maturity), junk bonds (10-year maturity), common stock, and preferred stock. You obtain one-year returns with beginning prices and rates from the first business day of the calendar year, and all ending prices and rates from the last business day of the calendar year, using library resources, the Internet, or other databases. (If you use the Internet, good sites for Treasury bills, notes and bonds are: www.fedstats.gov, www.federalreserve.gov, www.fiscal.treasury.gov/, andwww.ny.frb.org. Good web sites for information on stocks are: money.cnn.com, www.smartmoney.com, www.amex.com, and www.morningstar.com.)
What is the return on the U.S. Treasury notes?
What is the return on the U.S. Treasury bonds?
What is the return on the Ginnie Mae bonds?
What is the return on the municipal bonds?
What is the return on the corporate bonds?
What is the return on the junk bonds?
What is the return on the common stock?
What is the return on the preferred stock?
What is the weighted-average return for the capital market portfolio?
How does this weighted average return compare to the money market portfolio in Chapter 9?
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Mini Case Conch Republic Electronics Conch Republic Electronics Is A Midsized El
/in Uncategorized /by developerMini Case Conch Republic Electronics Conch Republic Electronics is a midsized electronics manufacturer located in Key West, Florida. The company president is Shelly Couts, who inherited the company. When it was founded over 70 years ago, the company originally repaired radios and other household appliances. Over the years, the company expanded into manufacturing and is now a reputable manufacturer of various electronic items. Jay McCanless, a recent MBA graduate, has been hired by the company’s finance department.One of the major revenue-producing items manufactured by Conch Republic is smart phone. Conch Republic currently has one smart phone model on the market, and sale has been excellent. The smart phone is a unique item in that it comes in a variety of tropical colors and is preprogrammed to play Jimmy Buffett music. However, as with any electronic item, technology changes rapidly, and the current smart phone has limited features in comparison with newer models. Conch Republic spent $750,000 to develop a prototype for a new smart phone that has all the features of the existing smart phone but adds new features such as wifi tethering. The company has spent a further $200,000 for a marketing study to determine the expected sales figures for the new smart phoneConch Republic can manufacture the new smart phone for $205 each in variable costs. Fixed costs for the operation are estimated to run 5.1 million per year. The estimated sales volume is 64,000, 106,000, 87,000, 78,000, and 54,000 per each year for the next five years, respectively. The unit price of the new smart phone will be $485. The necessary equipment can be purchased for $34.5 million and will be depreciated on a 7 year MACRS schedule. It is believed the value of the equipment in 5 years will be $5.5 million.Net working capital for the smart phones will be 20% of sales and will occur with the timing of the cash flows for the year (i.e. there is no initial outlay for net working capital). Changes in the net working capital will thus first occur in year 1 with the first year’s sales. Conch Republic has a 35% corporate tax rate and a required rate of 12% Shelly has asked Jay to prepare a report that answers the following questions:1)
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Mini Case Integrated Waveguide Technologies Iwt Is A 6 Year Old Company Founded
/in Uncategorized /by developerMini Case
Integrated Waveguide Technologies (IWT) is a 6-year-old company founded by Hunt Jackson and David Smithfield to exploit metamaterial plasmonic technology to develop and manufacture miniature microwave frequency directional transmitters and receivers for use in mobile Internet and communications applications. IWT’s technology, although highly advanced, is relatively inexpensive to implement, and its patented manufacturing techniques require little capital as compared to many electronics fabrication ventures. Because of the low capital requirement, Jackson and Smithfield have been able to avoid issuing new stock and thus own all of the shares. Because of the explosion in demand for its mobile Internet applications, IWT must now access outside equity capital to fund its growth, and Jackson and Smithfield have decided to take the company public. Until now, Jackson and Smithfield have paid themselves reasonable salaries but routinely reinvested all after-tax earnings in the firm, so dividend policy has not been an issue. However, before talking with potential outside investors, they must decide on a dividend policy.
Your new boss at the consulting firm Flick and Associates, which has been retained to help IWT prepare for its public offering, has asked you to make a presentation to Jackson and Smithfield in which you review the theory of dividend policy and discuss the following issues.
a. 1. What is meant by the term “distribution policy”? How has the mix of dividend payouts and stock repurchases changed over time?
2. The terms “irrelevance,” “dividend preference” (or “bird-in-the-hand”), and “tax effect” have been used to describe three major theories regarding the way dividend payouts affect a firm’s value. Explain these terms, and briefly describe each theory.
3. What do the three theories indicate regarding the actions management should take with respect to dividend payouts?
4. What results have empirical studies of the dividend theories produced? How does all this affect what we can tell managers about dividend payouts?
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Mini Case Iteam Inc 1 What Aspects Of The External Environment Are Most Likely T
/in Uncategorized /by developerI need help answering these questions. The micase is on the attachment or on the link provided below.
-Please use textbook or the link provide below:
Sales Force Management: Leadership, Innovation, Technology (Paperback) – 11.Edition – 2013 M. W. Johnston, G. W. Marshall Routledge ISBN: 9780415534628
https://books.google.com/books?id=59jYcsMqgKgC&pg=PA25&lpg=PA25&dq=iTeam,+Inc+minicase&source=bl&ots=JoQHbO_xeR&sig=23WqHLfsCzewred5UTR8QZxYA7k&hl=en&sa=X&ved=0ahUKEwjsyJLX5JXKAhWG9R4KHYMWDtgQ6AEISjAH#v=onepage&q=iTeam%2C%20Inc%20minicase&f=false
-All the questions are from chapter 1. For question #1 look at pages 12-18. For question #2 look at pages 19-21. Question #3 is your opinion.
1-What aspects of the external environment are most likely to affect iTeam, Inc.’s future planning, and what impact might each factor have? Pag 12
2-What aspects of the internal (organizational) environment at iTeam are most likely to affect its future planning, and what impact might each factor have? Pag 19
3-What advice can you give to Andrew Taylor with respect to iTeam’s future sales program? In your opinion, what steps should he take, given the external environment and the company’s current circumstances?
Running Head: MINI CASE: iTEAM INC MINI CASE:iTEAM INC Running Head: MINI CASE: iTEAM INCMINI CASE: iTEAM INC. 1. Components from the outside environment that could influence the iTeam’s future,…
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Mini Case Maya Lee And John Spencer Are Facing An Important Decision
/in Uncategorized /by developerMini Case:
Maya Lee and John Spencer are facing an important decision. After having discussed different financial scenarios into the wee hours of the morning, the two computer engineers felt it was time to finalize their cash flow projections and move to the next stage – decide which of two possible projects they should undertake.
Both had a bachelor degree in engineering and had put in several years as maintenance engineers in a large chip manufacturing company. About six months ago, they were able to exercise their first stock options. That was when they decided to quit their safe, steady job and pursue their dreams of starting a venture of their own. In their spare time, almost as a hobby, they had been collaborating on some research into a new chip that could speed up certain specialized tasks by as much as 25%. At this point, the design of the chip was complete. While further experimentation might improve the performance of their design, any delay in entering the market now may prove to be costly, as one of the established players might introduce a similar product of their own. The duo knew that now was the time to act if at all.
They estimated that they would need to spend about $2,500,000 on plant, equipment and supplies. As for future cash flows, they felt that the right strategy at least for the first year would be to sell their product at dirt-cheap prices in order to induce customer acceptance. Then, once the product had established a name for itself, the price could be raised. By the end of the fifth year, their product in its current form was likely to be obsolete. However, the innovative approach that they had devised and patented could be sold to a larger chip manufacturer for a decent sum. Accordingly, the two budding entrepreneurs estimated the cash flows for this project (call it Project A) as follows:
Year
Project A
Expected Cash flows ($)
0
($2,500,000)
1
$290,000
2
$400,000
3
$880,000
4
$1,600,000
5
$1,600,000
An alternative to pursuing this project would be to immediately sell the patent for their innovative chip design to one of the established chip makers. They estimated that they would receive around $200,000 for this. It would probably not be reasonable to expect much more as neither their product nor their innovative approach had a track record.
They could then invest in some plant and equipment that would test silicon wafers for zircon content before the wafers were used to make chips. Too much zircon would affect the long-term performance of the chips. The task of checking the level of zircon was currently being performed by chip makers themselves. However, many of them, especially the smaller ones, did not have the capacity to permit 100% checking. Most tested only a sample of the wafers they received.
Maya and John were confident that they could persuade at least some of the chip makers to outsource this function to them. By exclusively specializing in this task, their little company would be able to slash costs by more than half, and thus allow the chip manufacturers to go in for 100% quality check for roughly the same cost as what they were incurring for a partial quality check today. The life of this project too (call it project B) is expected to be only about five years.
The initial investment for this project is estimated at $ 2,600,000. After taking into account the sale of their patent, the net investment would be $2,400,000. As for the future, Maya and John were reasonably sure that there would be sizable profits in the first couple of years. But thereafter, the zircon content problem would slowly start to disappear with advancing technology in the wafer industry. Keeping all this in mind, they estimate the cash flows for this project as follows:
Year
Project B
Expected Cash flows ($)
0
($2,400,000)
1
$1,450,000
2
$1,215,000
3
$470,000
4
$285,000
5
$165,000
Maya and John now need to make their decision. For purposes of analysis, they plan to use a required rate of return of 15% for both projects. Ideally, they would prefer that the project they choose have a payback period of less than 4 years and a discounted payback period of less than 5 years.
Below are the results of the analysis they have carried out so far:
Metrics
Project A
Project B
Payback period (in years)
3.58
1.78
Discounted payback period (in years)
4.57
2.71
Net Present Value (NPV)
$343,534
$333,601
Internal Rate of Return (IRR)
19.22%
23.50%
Profitability Index
1.1374
1.1390
Modified Internal Rate of Return (MIRR)
18.00%
18.03%
One of the concerns that Maya and John have is regarding the reliability of their cash flow estimates. All the analysis in the table above is based on “expected” cash flows. However, they are both aware that actual future cash flows may be higher or lower.
Assignment:
Suppose that Maya and John have hired you as a consultant to help them make the decision. Please draft an official memo to them with your analysis and recommendations.
Your submission should cover the following questions:
An excellent paper will demonstrate the ability to construct a clear and insightful problem statement while identifying all underlying issues.
An excellent paper will propose solutions that are sensitive to all the identified issues.
b) John believes that the best approach to make the decision is the NPV approach. However, Maya is not so sure that ignoring the other metrics is a good idea. Which of the approaches or metrics would you propose? In other words, would you prefer one or more of these approaches over the others? Explain why. (20 points)
An excellent paper will include an evaluation of solutions containing thorough and insightful explanations, feasibility of solutions, and impacts of solutions.
b) Briefly state the limitations of the approach you used in making this decision, and outline what further analysis you would recommend. (20 points)
An excellent paper will provide concise yet thorough action-oriented recommendations using appropriate subject-matter justifications related to the problem while addressing limitations of the solution and outlining recommended future analysis.
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