As these competitors derived roughly 50% of their revenues from the U.S. market, a depreciation of the Yen could allow for greater incentives and savings to be passed onto U.S. consumers. Already equity analysts had estimated that the yen appreciation in the first half of 2000 from 117 to 107 reduced operating profits by $4B, thus this would be true for the reverse in the case where a depreciation would lead to an increase in operating profits. Answer 2: In 2001 General motor’s turned their attention to how fluctuation in the Yen affected GM’s costs. A great part of GM’s competitors, had a great part of costs origin in the Yen and this worried GM. The exposure that GM faced regarding the Yen was not only from Japanese equity investments and commercial exposure as of a receivable; GM’s equity investment in Japanese companies totaled at $817 million, the estimated receivable was $900 million.
The real question that needs to be asked is: Which engine is better in the long run and how fast can the engines be put to use? Electric powered vehicles have a lot of promise, such as zero emissions along with plenty to save at the gas stations that people will not have to visit anymore, but at what cost? Building an all new electric vehicle will cost the manufacturer about 20,000 dollars alone. With that price for manufacturers, one can expect the price on the lot would be over 25,000 or more. The Nissan Leaf is expected to price at 30,000 dollars (Winder), which would take years for a consumer to gain money back on it through savings on gasoline.
The firm is currently having problems cost effectively meeting run length requirements as well as meeting quality standards. The general manager has proposed the purchase of one of two large six-color presses designed for long, high-quality runs. The purchase of a new press would enable LI to reduce its cost of labor and therefore the price to the client, putting the firm in a more competitive position. The key financial characteristics of the old press and the two new presses are summarized in what follows. Old press – Originally purchased 3 years ago at an installed cost of $400,000, it is being depreciated under MACRS using a 5-year recovery period.
Precedents usually yield higher valuations than trading comps because a buyer must pay shareholders more than the current trading price to acquire a company. This is referred to as the control premium (use 20 percent as a 31 Customized for: JJ (jchen59@wisc.edu) Vault Guide to Private Equity and Hedge Fund Interviews Finance benchmark). If the buyer believes it can achieve synergies with the merger, then the buyer may pay more. This is known as the synergy premium. Between LBOs and DCFs, the DCF should have a higher value because the required IRR (cost of equity) of an LBO should be higher than
The case mentions that “a 90 % experience curve means that the cost decreases to 90% of its former value i.e. decreases by 10% every time the cumulative production doubles.” While this experience curve is a huge advantage to Tesla in the EV industry, it is simultaneously a huge disadvantage in the IC engine industry. In developing a gasoline/hybrid car, Tesla would have to spend time and money developing a completely new design. If Tesla invests in gasoline or hybrid vehicles, their manufacturing cost will increase significantly, as they have less experience than their competitors in this arena. Tesla faces a similar problem in regards to economy of scale if they were to invest in hybrid or gasoline vehicles.
2. Explain why you would be more or less willing to buy a house under the following circumstances: e. You just inherited $100,000. More because your wealth has increased f. Real estate commissions fall from 6% of the sales price to 4% of the sales price. More because it has become more liquid g. You expect Polaroid stock to double in value next year. Less because its expected return relative to other investments has reduced h. You expect housing prices to fall.
The average CPM will drop by 10% when compared to the current 2006 CPM ($2.00) Not targeting a specific market group could mean a loss in market opportunities due to specific aggressive competition from the other networks. **Considering 2007’s Base as a non-changing situation on TFC’s current strategy. Scenario 2 Target Group: Fashionistas Expected Ratings: 0.8 Potential CPM: $3.50 Average Viewers: 880,000 Additional expenses: $ 15 M PROS The profit margin will increase to 37% compared to the Base in year 2007** (19%) if this scenario is implemented. Advertisement may become more efficient; therefore CPM could increase to $3.50. (From $2.00) The targeted segment specifically represents better CPM rates than other groups, compensating for the generalized audience loss.
Using these figures and assuming that both heavy and medium users (those buying between 1-9 pounds of cyano-acrylates per year) are potential customers; the maximum size of this market is estimated at 81,000 purchases. At 157.50 per unit, even with 100% penetration the market will not be worth more than $12.77 million in sales, with a more realistic estimate being $ 4 million in sales. The disparate nature of usage patterns across firms make it difficult to identify critical variables that can form the basis of segmenting the market. Possible ways to segment customers is on the basis of nature of the firm (small firm vs. large firm); sector of business (which industrial markets to target), current usage behavior (heavy CA usage vs low CA usage), nature of work (OEM vs MRO), and brand loyalty (SuperBonder usage vs competitors). Given that data about
B&L must improve their disposable lens market only by a 5% margin in order to regain the market share held by Johnson & Johnson. The company suffer a (14.8) loss in earnings from continuing operations, however those losses are shown from the R&D Expenses which show a ($108.1) million dollar difference from 1992 to 1993 due to the increase in R&D. (Harvard Business School-Bausch & Lomb, Inc. 9-101-010 Exhibit 3 p. 7) The net sales were up from 1992 to 1993 to show a net gain of $ 163.1 gain in their optics division. My recommendation: Re-development of their distribution process for their conventional lens product, extending the credit line of so many distributors by more than a 25% increase has placed B&L into unaccredited worthy placement if more than 5% of their distributors fail. B&L can roll out the new distribution plan in three phases: Phase- One: Change the distribution method to the company top 10% distributors. Only the high volume distributors with the high volume customer change over first.
At 10 cents each, the expected revenue of $500 per day, and the amount will be lost while the copier is broken. The standard number of breakdowns per year to be 12.255 (dividing 52 weeks/year by 4.243 weeks/breakdown), the profit lost per breakdown to be $1,125 (days lost/breakdown * revenue lost/day), and finally the profit lost per year due to breakdowns to be $13,787 (breakdowns/year * profit lost/breakdown). 6. The profits lost per year due to breakdowns is $13,787, which is bigger than $12,000, they should procure a backup copier. A high