...Memorandum: To: Maurry Tamarkin Oct. 2, 2002 Subject: Fonderia di Torino S.p.A. Analysis of the Vulcan Mold-Making machine has been valued as was requested by Fonderia di Tortina. In order to assess the economic benefits, we started by comparing the cash flows, specifically the outflows after taxes for both mold-making systems see (exhibit 1-1). We assumed that two machines produce the same quantities of products, despite the fact that they have different capacities. Relying on this assumption, we found the present values of costs associated with each machine using the discount rate 9.9% of Weighted Average Cost of Capital. Then in order to be able to compare each project on an annual basis, we determined the equivalent annual costs by using the annuity factor related with each machine and examined the outcomes to see which machine would be least expensive to acquire and operate. We can conclude from this analysis that the Vulcan Mold-Maker has lower annuity payments than the six current machines and therefore we might conclude that NPV analysis might warrant the investment into the new machine assuming that other related factors would be in favor of the new investment. However, when assessing the economic benefits there were many qualitative factors that needed to be considered. For example: • Cerini was unsure whether the tough collective bargaining agreement her company had with the employees’ union would allow her to lay...
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...CEAG – Disciplina: Avaliação de Empresas (Valuation) - Profº João Carlos Douat Alunos: Carlos Lima Campos, Mariana Yukie Miyazaki e Sergio Varella Petti Estudo de Caso: Fonderia Di Torino S.P.A. 1. Cenário A empresa Fonderia di Torino, fabricante de peças de fundição, quer investir em uma máquina automática de modelagem, chamada Vulcan Mold-Maker, para substituir a máquina semi-automática. A máquina antiga exige mais mão-de-obra e é mais prejudicial à saúde dos trabalhadores enquanto que a nova máquina é mais produtiva e eficiente. No entanto, o maior impedimento para a compra da nova máquina é o acordo entre a companhia e a união dos trabalhadores pois com a aquisição, 24 operadores seriam demitidos. A empresa agora precisa decidir se investe ou não na nova máquina. 2. Avaliação da viabilidade do projeto utilizando técnicas de análise de investimentos Para analisar a viabilidade da aquisição da nova máquina foram adotadas algumas técnicas de análise de investimentos: * Payback simples e descontado A partir da estimativa do incremento do fluxo de caixa, podemos calcular o payback simples e descontado do projeto. É o tempo de retorno do investimento inicial até o momento no qual o ganho acumulado se iguala ao valor deste investimento. Para o cálculo do payback simples, o fluxo de caixa não é descontado: Payback simples 0% inflation=4+ 148.717166.145=4,90 Payback simples 3% inflation=4+ 124.425182.749=4,68 Para o cálculo do payback descontado...
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...UNIVERSITY OF WASHINGTON Graduate School of Business Administration Finance 553 CAPITAL INVESTMENT PLANNING Winter 2003 Professor Robert C. (Rocky) Higgins 306 Mackenzie Hall Tel: 543-4379 E-mail: rhiggins@u.washington.edu Homepage: http://us.badm.washington.edu/higgins/ (From here you’re one click from the class page) Office Hours: M, W: 10:30 – 12:00 COURSE OBJECTIVE Capital Investment Planning is a case course examining corporate investment decisions and related issues in financial strategy. The course is intended as a continuation of Finance 552, Corporate Planning and Financing, and is suitable for generalists and finance specialists who seek a solid grounding in corporate financial management. Finance 555 may be substituted for Finance 552 as a prerequisite. Principal topics include: use of discounted cash flow analysis to evaluate investment opportunities, estimating capital costs, or discount rates, capital budgeting systems and their affect on resource allocation decisions, valuing a company or division, merger analysis, corporate restructuring including leveraged buyouts, and issues in financial strategy. When you complete this course, you should be able to: Estimate an investment’s relevant costs and benefits Estimate a company's weighted-average cost of capital and understand its role in investment decision making Use discounted cash flow techniques, decision trees, and simulation to analyze investment opportunities Value (i...
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