Kidman Resources is considering a binding agreement with Tesla inc. to supply 5000 tonnes of lithium hydroxide for three years. However in order process the required amount of lithium hydroxide, Kidman Resources must consider whether to build a new refinery or outsource their supply ore (Li20).

Kidman Resources has undertaken a feasibility study costing $2 million to explore these two strategies.

Option 1: Building a new refinery

The construction and installation of a new refinery will cost $25 million. In addition, a processing plant will also need to be constructed at a cost $5 million. This plant will need to be supplied with grinding machines, DMS flotation machines and other equipment at a total cost of $15 million. Kidman Resources’ current fleet of Haul trucks, water carts and dump trucks will meet the needs for this project, however until recently, the fleet has been earning a rental income of $100,000 per year.

Under the agreement with Tesla inc., the lithium mined is expected to generate a revenue of $16 million per year, which will increase by 2.5% per annum adjusted for rising costs. Due to the additional complexities involved with the construction and management of this new refinery, 5 new engineers (yearly salary per engineer $180,000) will replace 5 existing engineers (yearly salary per engineer $120,000). All other remaining labour force required is expected to cost $3 million per annum for the duration of the project.

For tax reasons you will expense the cost of the processing plant immediately. The cost for the construction and installation of the new refinery and associated machines and equipment will be depreciated over three years using the straight-line method. Due to the nature of the mining project, the machines and equipment will likely have a salvage value of $9 million at the end of three years. Finally, the required net working capital is $2 million.

Option 2: Outsourcing the supply of ore

Alternatively, Kidman Resources can contract BHP to supply the required ore to process into lithium hydroxide. Based on the required amount of lithium hydroxide, management has quoted a total cost of $30 million. BHP has however offered this rate on the condition that Kidman Resources pays 20% of the total cost in advance in the beginning of the year, with the remaining paid in equal instalments thereafter. Kidman Resources will process the ore into lithium hydroxide using existing facilities at an expected cost of $4.5 million per year.

Additional Information:

• The company’s preference shares are currently trading at $0.70 each. The company’s ordinary shares are currently trading at $1.17 each.
• The risk-free rate of return is 2.38 % p.a., and the return on the market is 7.80 % p.a.
• Debentures have a coupon interest rate of 9% p.a. and could be re-issued at the present time at an interest rate of 8.5% p.a. The debentures will be redeemed at their face value in three years’ time.
• The mortgage loan is repayable in eight years’ time and the current interest rate is 5.25% p.a. The mortgage was initially negotiated at 9.35% p.a.
• Term loans have a current interest rate of 6% p.a., but were negotiated at an interest rate of 7% p.a. They are repayable in full in three years’ time. The term loans consists of regular semi-annually interest payments with the principal repaid at maturity
• Unsecured notes will mature in six months and will not be replaced. They have a current interest rate of 2.8% p.a.
• The current interest rate on the bank overdraft is 6.0% p.a.
• Interest on all debt securities is paid twice-yearly and the corporate tax-rate is 28
• percent

Evaluate the two options using NPV analysis and clearly identify which of the two alternatives results in a higher valuation for Kidman Resources. Include your opinion.

 

"Looking for a Similar Assignment? Get Expert Help at an Amazing Discount!"

Kickem Ltd. (Kickem) is a well-known company which manufactures soccer balls with a reputation for making a quality product. A competitor, Roundball Ltd. (Roundball) also manufactures soccer balls. Roundball produces a television advertisement which compares their product with those of other manufacturers. The advertisement states that Roundball uses superior leather and binding to other manufacturers and the balls they make produce a much faster game because of its superior product.

Kickem has discovered that in fact, Roundball uses the part of a hide which is not as durableas that used by Kickem and wears out much faster. They consider Roundball’s product to beinferior to theirs and want to take action against Roundball under the Competition and Consumer Act 2010 (Cth).

Using the Competition and Consumer Act 2010 (Cth) and relevant cases, discuss whether Kickem could take action under this Act and whether they are likely to be successful.

 

"Looking for a Similar Assignment? Get Expert Help at an Amazing Discount!"

KHP is an acid with one acidic hydrogen and a molar mass of 204.22 g/mol. In the titration, 20.46 mL of the sodium hydroxide solution was required to react with 0.1082 g KHP. Calculate the molarity of the sodium hydroxide

 

"Looking for a Similar Assignment? Get Expert Help at an Amazing Discount!"

Kimberly needs a laptop for her schoolwork now while in high school, and plans to keep it through college. She does not have the cash upfront so she has decided to take out a 9 month installment loan. 

Best Buy is selling the computer she wants for $2500. She can get a loan at 8.5% now and pay it back in 9 months.

Office Max has the same computer for $2399, for which she can get a loan at 9%.

Use bankrate.com amortization calculator (http://www.bankrate.com/calculators/mortgages/amortization-calculator.aspx) to view the amortization schedule for each loan. Remember that the term of the loan is 9 months. She will not make a down payment and will be borrowing the full purchase price of the computer.

1) Use bankrate.com to find the monthly payment for each.

2) Calculate the total amount of interest paid for each, once she has paid back the loan.

3) Where should she get her laptop from and why?

 

"Looking for a Similar Assignment? Get Expert Help at an Amazing Discount!"

Counterargument Paper

This paper assignment expands upon your Week One Assignment and prepares you for the Final Paper. The expansion is to learn to improve one’s argument after investigating and fairly representing the opposite point of view. The main new tasks are to revise your previous argument created in Week One, to present a counterargument (an argument for a contrary conclusion), and to develop an objection to your original argument.

Here are the steps to prepare to write the counterargument paper:

• Begin reviewing your previous paper paying particular attention to suggestions for improvement made by your instructor.

• Revise your argument, improving it as much as possible, accounting for any suggestions and in light of further material you have learned in the course. If your argument is inductive, make sure that it is strong. If your argument is deductive, make sure that it is valid.

• Construct what you take to be the strongest possible argument for a conclusion contrary to the one you argued for in your Week One paper. This is your counterargument. This should be based on careful thought and appropriate research.

• Consider the primary points of disagreement between the point of view of your original argument and that of the counterargument.

• Think about what you take to be the strongest objection to your original argument and how you might answer the objection while being fair to both sides. Search in the Ashford University Library for quality academic sources that support some aspect of your argument or counterargument.

  In your paper,

• Present a revised argument in standard form, with each premise and the conclusion on a separate line.

• Present a counterargument in standard form, with each premise and the conclusion on a separate line.

• Provide support for each premise of your counterargument. Clarify the meaning of the premise and supporting evidence for the premise.

  • Pay special attention to those premises that could be seen as controversial. Evidence may include academic research sources, supporting arguments, or other ways of demonstrating the truth of the premise (for more ideas about how to support the truth of premises take a look at the instructor guidance for this week). This section should include at least one scholarly research source. For guidance about how to develop a conclusion see the Ashford Writing Center’s Introductions and Conclusions (Links to an external site.)Links to an external site..

• Explain how the conclusion of the counterargument follows from its premises. [One paragraph]

• Discuss the primary points of disagreement between sincere and intelligent proponents of both sides. [One to two paragraphs]

  • For example, you might list any premises or background assumptions on which you think such proponents would disagree and briefly state what you see as the source of the disagreement, you could give a brief explanation of any reasoning that you think each side would find objectionable, or you could do a combination of these.

• Present the best objection to your original argument. Clearly indicate what part of the argument your objection is aimed at, and provide a paragraph of supporting evidence for the objection. Reference at least one scholarly research source. [One to two paragraphs]

  • See the “Practicing Effective Criticism” section of Chapter 9 of your primary textbook for more information about how to present an objection.

    For further instruction on how to create arguments, see the How to Construct a Valid Main Argument (Links to an external site.)Links to an external site. and Tips for Creating an Inductively Strong Argument (Links to an external site.)Links to an external site. documents as well as the video Constructing Valid Arguments (Links to an external site.)Links to an external site..

    For an example of how to complete this paper, take a look at the following Week Three Annotated Example (Links to an external site.)Links to an external site.. Let your instructor know if you have questions about how to complete this paper.

    The Counterargument Paper

• Must be 500 to 800 words in length (not including title and references pages) and formatted according to APA style as outlined in the Ashford Writing Center (for more information about using APA style, take a look at the APA Essay Checklist for Students (Links to an external site.)Links to an external site. webpage).

• Must include a separate title page with the following:

  • Title of paper

  • Student’s name

  • Course name and number

  • Instructor’s name

  • Date submitted

• Must use at least two scholarly sources in addition to the course text.

• The Scholarly, Peer Reviewed, and Other Credible Sources table offers additional guidance on appropriate source types. If you have questions about whether a specific source is appropriate for this assignment, please contact your instructor. Your instructor has the final say about the appropriateness of a specific source for a particular assignment.

• Must document all sources in APA style as outlined in the Ashford Writing Center (for more information about how to create an APA reference list, take a look at the APA References List (Links to an external site.)Links to an external site. webpage).

• Must include a separate references page that is formatted according to APA style as outlined in the Ashford Writing Center.

 

"Looking for a Similar Assignment? Get Expert Help at an Amazing Discount!"