...Case Study No. 1: American Chemical Corporation 1. Briefly provide a synopsis of the case and clearly describe the main problem raised in the case. (10 points) American Chemical, a diverse chemical company in the late1970s, wanted to acquire, through a share buyout, Universal Paper Corporation. Universal sued them on the stance that it would violate an antitrust law, because its sodium-chlorate production division would digest Universal’s large division creating a lack of competition in the Southeast United States. To alleviate this, American Chemical divested that division in a plant they had in Collinsville Alabama, subsequently looking for a buyer, once they were able to acquire 91% of Universal. Dixon, another chemical company was the one for the job and wanted to purchase the Collinsville plant from American Chemical. Dixon’s motive is to diversify itself by obtaining a $12 million sodium chlorate plant to supply to paper producers in the Southeast. However, the plant had begun a new laminate technology to increase efficiency and profitability, and that accounted for an additional $2.25 million. The main question of this case is not whether it was the correct decision for American to acquire Universal; it’s whether it’s a smart decision for Dixon to acquire the Alabama sodium chlorate plant from American Chemical. Dixon must determine the research for a CF Analysis with and without the acquisition of the plant and decide which produces a better NPV. In order to...
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...Meier, 1 Dixon Corporation: The Collinsville Plant (Abridged) Case Analysis Prepared by Renee Meier, Cohort B November 12, 2010 Prepared For Brett Hunkins MBA 634: Measurement II Richard DeVos Graduate School of Management Meier, 2 Dixon Case Analysis Introduction Dixon Corporation, a specialty chemical company is considering the purchase of a sodium chlorate plant in Collinsville, Alabama. This opportunity will allow Dixon to expand its market and product line. Because of the location of the plant and its’ current market share, the Collinsville plant seems to be a good fit with the current business already established at Dixon. Dixon has a successful track record in the specialty chemical business and is evaluating the impact of the purchase. A case analysis is provided to understand the financial implications and to determine under what conditions the purchase should be made if made at all. The Collinsville plant is being sold by American Chemical Company as a condition of their purchase of Universal Paper. They are eager to sell. The asking price is $12 million and they are offering new laminate technology for an additional $2.25 million. The technology has not been fully implemented and is expected to roll out in late 1980, almost a year after the original purchase. American Chemical has pledged product information and technical support throughout the year with full support upon roll out. The case is prepared with two scenarios: Purchase of the Collinsville...
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...Dixon Corporation, an American specialty chemicals producer, wants to buy Collinsville plant in October 1979 from American Chemical Corporation, another typical chemicals company. This plant initially costs $ 12 million, and additional optional $ 2.25 million needed to buy and install laminate technology to increase efficiency and profitability of the plant in order. A firm that is operating in the interests of its shareholders should accept all projects that increase the wealth of the shareholders. In the case of Collinsville, we have used the Net Present Value to make our recommendations. We could also have used another criterion: the Internal Rate of Return (IRR). All the details of the calculation of the NPV are in appendices attached (calculation of the WACC, which is 14,183%, and the NPV with and without laminate technology). Based on our calculations, without the laminate technology, the NPV of Collinsville turns out to be negative ($ 1 714.13 thousands). Thus, we do not recommend investing in this project since it is against shareholders’ interests. However, with the laminate technology that enables to cut power costs (which are the main charge) and eliminate graphite costs, the NPV of the project becomes positive ($ 2 409.23 thousands). In that case, we do recommend acquiring Collinsville plant, because it increases the wealth of the shareholders and it enables Dixon to complement its strategy of supplying chemicals products to the paper and pulp industry. Moreover...
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...The Marketing of Fast Food and the Rise in Health Problems As we know, globalization of fast-food and processed food corporations have become somewhat of a problem for various reasons. While many countries have the same choices Americans have, it is easy to see that over advertising of fast and processed foods causes Americans to be lazy in food preparation, which causes health problems, which is why large food corporations should limit their advertising. This chain of events is all too familiar in modern American culture, but not necessarily exclusive. Through research, it has been found that Americans are more susceptible to marketing and advertising of this type of food than most countries. Many ask, “Why?” While there is no precise answer everyone can agree on, we can point out 3 defining factors as to why Americans are more likely to purchase fast food rather than having a home-cooked meal. Compared to the rest of the world, Americans consume more fast food than even China which has almost as many fast-food restaurants as America does. The fad of fast-food can be explained as something that has gained momentum over the years of economic downfall, apathy towards health, and a collective divide on what we has humans should eat to stay healthy and live longer. Advertising is at an all-time high for not only fast-food corporations, but for processed-food companies such as Kraft or General Mills. The “evil genius” mentality behind their marketing is in that their target markets...
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...Study of Corporation By-laws Table of Content I. Introduction II. Standard template of Corporation By-laws III. Case study (focus on corporation control provision) a. JP Morgan b. Lorillard c. KRAFT d. NYACS e. DUPONT CIRCLE CONSERVANCY IV. Summarization I. Introduction Corporate and organizational bylaws contain the rules and procedures that regulate the organization to which they apply and are generally concerned with the operation of the organization. It can govern the rights and powers of shareholders, directors, and officers. Generally, Bylaw of a corporation cannot be amended only by organization's board of directors. A super-majority vote of the membership, which means two-thirds present and voting or a majority of all the members, is usually required to amend bylaws. Therefore, corporation bylaw is an important regulation for the top of the company to restrict and supervise each other, and impel the members to achieve the common goal for the company. In order to further study the practical application of corporation bylaws， there are 5 actual corporation bylaws from different industries will be compared and analyzed later. II. Standard template of Corporation By-laws Bylaws widely vary from organization to organization, but generally cover topics such as how directors are elected, how meetings of directors (and in the case of a business, shareholders) are conducted, and what officers the organization will have and a...
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...American Chemical Corporation Context The business environment leading up to 1979 was a very challenging one as the U.S. economy was still on the heels of a period of high inflation, low growth and high unemployment that started in the 1970s. The deep recession hit almost all sections of the economy. Real gross national product (GNP) fell by 2.5 percent while the unemployment rate rose above 10 percent and almost one-third of America's industrial plants lay idle. Company The Dixon Corporation is a specialty chemicals company that supplies primarily to the paper and pulp industry. The company’s products are mainly used by paper companies as a bleaching agent for pulp. Dixon’s principal plant was located in Calhoun, Georgia, and mostly supplied paper and pulp companies in the southeastern United States. The company achieved strong growth with a compounded annual growth sales of 17% for the past 5 years (1974-1979) and improved net margins to 9.5% by 1979 as the sodium chlorate market remained resilient despite the difficult economic situation. Customers The primary customers of the sodium chlorate producers are the paper and pulp industry, which accounts for approximately 85% of total production. As such, growth in the markets will essentially mirror growth in the pulp & paper industry. The 1970s was a turbulent period for the paper and pulp industry, marked by greatly intensified competition, periods of overcapacity (especially in 1976), a deep recession in...
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...MEMORANDUM Date: To: American Chemical Corporation From: Issue: How should ACC accrue and disclose the trial decision on their financial statement? Recommendation: American Chemical Corporation should accrue and disclose the loss contingency on its Condensed Financial Statements from the lower court’s trial decision in the lawsuit from the Environmental Protection Agency. Sources: Discussion: This memo will discuss the accounting standards and adjustments for accruing and disclosing the loss contingency for American Chemical Corporation (ACC). Mr. Molina and the management team chose not to accrue and disclose the loss in the lower court’s trial decision; this violates the FASB accounting standards. A lower trial court had imposed a $70 million fine payable to the Environmental Protection Agency (EPA) for a series of pollution law violations. The company immediately appealed to the U.S. District court and had set aside the fine to a lower cost. ACC’s external legal counsel assumed that the Court will hear the case in approximately three years, and it probably will assert the trial court’s decision to impose a fine. With the legal counsel’s analysis of similar cases, the estimated ranges of potential monetary outcomes were from $30 million to $70 million. ACC has put forth $5 million in legal fees as a reasonable estimate of the cost to appeal. With the appeal, the ACC, EPA, and the World Bank entered into an assumption agreement. ACC assigned a security...
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...In 1993, Chemical Bank and Hanover Corporation concluded a merging process. The new larger banking company was better-positioned to compete with other major players in the market. Michael Hegarty, the head of the Retail Bank Division of Chemical Banking Corporation, wanted to transform the bank into a market-focused organization that would be the financial service provider of choice to targeted customer groups. This strategy needs major investments to understand customer needs and to identify attractive customer segments. The bank also had to develop and tailor new products to meet customer needs in the targeted segments. For the new larger banking it was a dramatic and extensive strategic change. Michael Hegarty's biggest problem was communicating and reinforcing the strategy. The balanced scorecard was introduced to define strategic priorities and provide a structure to link strategy, budgeting and results. In other words, the balanced scorecard is one of a set of tools used for strategy formulation and communication. Hegarty's expectations from the scorecard were to give them measures to stay focused on performance, while enabling to clarify and communicate vision, and focus energies for change. Before analyzing the merger between Chemical Bank and Hanover Corporation, we start by presenting the context in the 90's. Then, we analyze the implementation of the Balanced Scorecard, and the impact of the merger. Finally, in order to compare the merger of Chemical bank with...
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...Nygaard: Professional Autonomy versus Corporate Control ISSN: 1893-1049 Volume 2, No 1 (2012), pp. 11-26 http://urn.nb.no/URN:NBN:no-30971 Pål Nygaard Professional Autonomy versus Corporate Control Abstract: Professionalism and bureaucracy tend to be understood as incompatible systems of work organization, represented by the ideals of collegiality and autonomy versus control and supervision. I present a historical case study from early 20th century Norway examining the potential clash between efforts made toward professionalization and bureaucratization in industry. Based on my findings, I argue that there is neither an inherent conflict between professionalism and bureaucracy nor static national trajectories at the level of professional versus bureaucratic work organization. Keywords: professionalism; bureaucracy; engineers; engineering; history; transnational Pål Nygaard Centre for the Study of Professions, Oslo and Akershus University College of Applied Scineces Contact: Department of Innovation and Economic Organisation, Handelshøyskolen BI, 0442 Oslo, Norway Pal.Nygaard@ bi.no Page 11 For a long time, theories on professions brought forth the contention of an inherent conflict between professionalism and bureaucracy, contributing to a division between the sociology of professions and organizations. During the past decade, various scholars have contested both the argument of conflict and the fruitfulness of division (Bourgeault, Hirschkorn, & Sainsaulieu...
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...hydroelectric power for a model industrial city. Time Frame: Between 1942 and 1953 Hooker Chemical disposed of about 22,000 tons of mixed chemical wastes into the Love Canal. Background of the case Near the end of the nineteenth century, after America was once again a unified country, the entrepreneurial pioneers looked towards shipping. Many canals, such as the C&O and Erie Canals, unified American waterways to provide an efficient shipping system. In 1894, venture capitalist William Love envisioned a "power canal" (the purpose of which was to supply cheap hydroelectric power) in the Niagara Falls region of New York State. Construction began on Love's vision, but soon a depression hit the nation, and Love was left with no investors and little more than an empty ditch. "Love Canal"--as the hole became affectionately known by the local townspeople-- became a swimming hole in the summer, and an ice skating rink in the winter. This attitude towards the canal was to end by the mid-1900's. In 1942, Hooker Chemical and Plastics Corporation negotiated a deal with the current title-holders of the land, the power company, whereby the Corporation was allowed to dump any wastes into the canal. Hooker finally bought out the land, and its surroundings, in 1947. To the company's defense, [the chemicals were dug into impermeable clay soil [oec], but many tons of hazardous, indeed deadly, chemicals were then dumped into the Love Canal. Local homeowners were not apt to complain, for environmental...
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...Bulletin of Science, Technology & Society http://bst.sagepub.com/ Green Advertising and Green Public Relations as Integration Propaganda Nina Nakajima Bulletin of Science Technology & Society 2001 21: 334 DOI: 10.1177/027046760102100502 The online version of this article can be found at: http://bst.sagepub.com/content/21/5/334 Published by: http://www.sagepublications.com On behalf of: National Association for Science, Technology & Society Additional services and information for Bulletin of Science, Technology & Society can be found at: Email Alerts: http://bst.sagepub.com/cgi/alerts Subscriptions: http://bst.sagepub.com/subscriptions Reprints: http://www.sagepub.com/journalsReprints.nav Permissions: http://www.sagepub.com/journalsPermissions.nav Citations: http://bst.sagepub.com/content/21/5/334.refs.html >> Version of Record - Oct 1, 2001 What is This? Downloaded from bst.sagepub.com at University of Wollongong on October 1, 2013 BULLETIN2001/SCIENCE, TECHNOLOGY & SOCIETYPR Nakajima tober OF GREEN ADVERTISING AND GREEN / Oc- Green Advertising and Green Public Relations as Integration Propaganda Nina Nakajima University of Toronto lic perception must also be managed. To avoid a negative public image, companies can create the perception that they are effectively handling the problem. This way, public support can be maintained while actually doing very little to solve the problem. Technological change continues to accelerate, and with it come unintended...
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...Motorking Corporation New Gas Extender As Motorking Corporation considers introducing its now “gas extender” product into the market, the management must consider various factors to determine if this is a good financial move. The production manager needs to determine if the product will generate a profit for the corporation, how much product is expected to sell to determine how much to produce and how much to outsource. The first thing that the production manager must consider is the optimal quantity of cases that can be produced. The marketing manager has indicated that if the economy is strong then Motorking will sell 100,000 cases. If the economy is moderate Motorking will sell 70,000 cases, and if the economy is weak, then Motorking will only sell 40,000. The production manager must factor in all associated costs in making the product which in this case are the cost for producing the product at the Motorking’s manufacturing facility. Motorking can produce up to 50,000 cases at the cost of $5 average variable cost per case. It will cost $9 per case if the product is produced outside. And there is a marketing and overhead cost of $12 per case whether the product in produced at Motorking or outside. Based on this information, the payoff matrix is provided to the production manager. The optimal quantity of cases to be produced is 100,000 with a potential profit of $1,995,00. Based on optimal quantity of cases to be produced, management must decide to have 50,000 cases of...
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...FI 8320, Spring 2005 Cases and Readings in Corporate Finance [pic] [pic] [pic] [pic] Instructor Professor David C. Nachman Office: RCB 1239 Phone: 651-1696 email: dnachman@gsu.edu Office Hours: W 10:00 am – 2:00 pm, or by appointment Prerequisites FI 8000 CSP: 1, 2, 6 Course Description This course focuses on financial policy-making through case analyses, contemporary readings from the professional literature, and problem solving. The emphasis in the course is on investment and financing decisions and their impact on firm value and on capital market imperfections and their impact on the raising of corporate capital. The course also provides an opportunity for the study of additional topics of special current significance such as capital structure and dividend policy, corporate restructuring and the market for corporate control, real options, risk management, international capital budgeting and financing, financial planning and working capital management, project financing, reorganizations and advanced equity valuation. Course Material Required text material • (BMA) R. A. Brealey, S. C. Myers and F. Allen, Principles of Corporate Finance, 8th ed., McGraw- Hill/Irwin, Inc., 2006. •(RP) Reading Packet •(CP) Case Packet The required text (BMA) and the materials that make up the Case Packet (CP) are available at the GSU Book Store. The Reading Packet (RP) is available at ERes. Contents of (CP) and (RP) (with ERes access instructions) follow...
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...FI 4320, Spring 2005 Cases and Readings in Corporate Finance [pic] [pic] [pic] [pic] Instructor Professor David C. Nachman Office: RCB 1239 Phone: 651-1696 email: dnachman@gsu.edu Office Hours: W 10:00 am – 2:00 pm, or by appointment Prerequisites FI 4000 CSP: 1, 2, 4, 6 Course Description This course focuses on financial policy-making through case analyses, contemporary readings from the professional literature, and problem solving. The emphasis in the course is on investment and financing decisions and their impact on firm value and on capital market imperfections and their impact on the raising of corporate capital. The course also provides an opportunity for the study of additional topics of special current significance such as capital structure and dividend policy, corporate restructuring and the market for corporate control, real options, risk management, international capital budgeting and financing, financial planning and working capital management, project financing, reorganizations and advanced equity valuation. Course Material Required text material • (BMA) R. A. Brealey, S. C. Myers and F. Allen, Principles of Corporate Finance, 8th ed., McGraw- Hill/Irwin, Inc., 2006. •(RP) Reading Packet •(CP) Case Packet The required text (BMA) and the materials that make up the Case Packet (CP) are available at the GSU Book Store. The Reading Packet (RP) is available at ERes. Contents of (CP) and (RP) (with ERes access instructions)...
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...the buyers deposit, but the seller shall be limited to this remedy and only this remedy.” Vivian read and signed the contract and gave Bernie a check for $1000. Two weeks later Vivian is unable to come up with the funds to buy the car. On March 24th, she called Bernie to inform him that she is pulling out of the deal. Bernie lets her know he is keeping her deposit in accordance with their agreement. Vivian is claiming there was no mutuality of the contract and therefore it is void. Issue Presented The issue in this case is under applicable law in Virginia, is whether there was mutuality of consideration in Bernie and Vivian’s transaction. Applicable Law In Gay Nineties, Inc. v. International Dining Club, 21 Va. Cir. 492 (Va. Law & Eq. Ct. 1973),A dining club and a corporation entered into contract to provide goods and services for the members of the dining club in exchange for the corporation to have a membership with the dining club. The corporation filed suit to void the contract. The courts ruled there was mutuality of the contract, as each side provided consideration. “Where performance is offered and accepted by both parties, the necessary mutuality comes into existence even though it did not exist in the beginning. The offer to perform does not...
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