Capital Budgeting Analysis Research Paper Example | Topics and Well Written Essays - 1000 words

Capital Budgeting Analysis - Research Paper Example This shows that the company has improved on the efficiency of the usage of the assets of the company. This is also depicted by an improving asset turnover over the three year period. In 2003, the company generated $1.25 of revenue for every $1 invested in the assets of the company. Moreover, the company is also maintaining a strong control on its administrative and selling expenses; this is depicted by an improving net profit margin. This signifies that the company has strong growth prospects in future and could pave it way to become the market leader in its line of products. Figure 1 Figure 2 Figure 3 Since the company has strong future prospects, the company can use the IPO to its advantage. It will provide Superior Living Inc with the much needed capital money for expansion of its product lines including the production facility. The ‘going public’ stance will also boost the awareness of the company products in the market and develop a whole new batch of potential cust omers. This can eventually lead to an increase in the market share of the company. However, once Superior Living Inc goes public, she will have to face a number of challenges as well. The company will require fulfilling all the necessary obligations of the Securities and Exchange Commission as well as Sarbanes-Oxley Act which will lead to additional costs. Similarly, the management will come under immense scrutiny and pressure from different stakeholders which can lead to somewhat questionable practices for boosting earnings. This is because investors look at short term growth instead of the long term stability in the company. Debt is another option to the company to fulfill the capital requirements for the necessary expansion. the debt option will provide the company with the total control of the business with no scrutiny and pressures from the investors and other stakeholders. Similarly, the interest on the debt will provide a beneficial shield to the company as it will lower the future tax liabilities. However, the debt financing option will increase the leverage of the company; thereby increasing the chance of bankruptcy. Superior Living Inc has a moderate debt to total assets and debt to equity ratio. As shown in figure 4, the company finances only 28.3 percent of its total assets through the short term and long term debt. If the company funds the new production facility through debt, the ratio will still stay below 30 percent. Figure 5 depicts the debt to equity position of the company. The company has maintained an excellent interest coverage ratio over the three year period. It does not face any chance of interest payment crisis in near future; therefore, can easily use this option as well. Figure 4 Figure 5 The company has huge growth potential and a chance to explore new markets and product ranges. The new production facility is the need of the time; and therefore must be carried be carefully analyzed and carried forward. The new production facilityà ¢â‚¬â„¢s cash flows were analyzed at different hurdle rates. Since the Net Present Value of the project is positive at all three possible hurdle rates, the project must be carried forward. Similarly, the Internal Rate of Return is greater as compared to each hurdle rate; therefore the project is acceptable. The project has a simple payback period of 3 years. However, the discounted payback period 4 years at a

American and Great Civil War Research Paper Example | Topics and Well Written Essays - 1000 words

American and Great Civil War - Research Paper Example Rising figures of secessionists maintained that this tradition could only be secured by gaining sovereignty. Disciplinary Content The battle itself was ignited by the rejection of the slave countries to accept the judgment of the year 1860 presidential vote, which had spotted the first Republican contender, Lincoln, take the northern part but did not get any electoral ballot in the South. South passed order of secession, took federal installations, and identified out their armed force (Chikering & Forster). These states position up their own union with a pro-slavery organization led by an associate leader, Jefferson, and this fresh government positioned its capital originally at Montgomery, Alabama. The revolt government was ready to get rid of the two remaining central outposts on their region, at Pensacola and at Fort Sumter in Charleston port. Subsequent to a confrontation enduring four months, the union attacked the latter on April the year 1861. President Lincoln reacted by issu ing a public statement calling for seventy thousands volunteers for three months to repress a revolt against centralized authority. Nearly all people involved thought that the disagreement would be for a short time. Maybe it would have been if the separated states had stayed simply seven in number; nevertheless, four significant states of the Upper South, brook away instead of co-operating in the oppression of their sister slave countries. They added not just to the Confederacy's populace and regions but as well to its sparse manufacturing resources (Chikering & Forster). Even though, geography positioned Virginia and Tennessee particularly in the extreme front line suppose military actions escalate. So big was the union that a number of powerful figures disbelieved whether it might be physically engaged and put their hopes in the marine blockade, which was proclaimed on 19 April. Without doubt, the South's physical advantages increased to an established sense of bravery that sovere ignty could be gotten easily. A prevalent certainty in a short battle was supported in the North by an attentiveness of a great inequality in resources. The entire populace of the USA in the year 1860 was 31, 443, and 321. Out of these, the residents of the southern countries were eight million of who three million were slaves. The border countries (Kentucky, Maryland, and Missouri) had a populace of three million. During the year, 1861 to ensure the devotion of the Border countries stayed a top precedence for the Lincoln government. If secession were partial to eleven states subsequently, the upper states could gather together four million war men to the union 1, 100, 000. The industrial inequality was even larger (Chikering & Forster). The regions of Massachusetts and Pennsylvania without help produced more industrialized goods than the whole Confederacy. Differences and Similarities The South could manufacture enough food to nourish itself but did not have the means to ferry it. In the year 1860, only nine thousand miles of the USA total of thirty-one miles of railway trail could be established at the bottom, and southern engineers had finished only nine of the four hundred and seventy locomotives constructed before the year 1860. However, a material inequality in itself does not assure success and Lincoln's main issue was in assembling and organizing