15 Jul Unit 3 DBThe President of EEC recently called a meeting to ann
Unit 3 DBThe President of EEC recently called a meeting to announce that one of the firm’s largest suppliers of component parts has approached EEC about a possible purchase of the supplier. The President has requested that you and your staff analyze the feasibility of acquiring this supplier. Discuss the following: ( What information is needed to analyze this investment opportunity? What will be your decision-making process? All future costs are relevant in decision making. Do you agree? Why? Capital budgeting decisions fall into 2 broad categories: screening decisions and preference decisions. Discuss this. Which do you think EEC should use—screening decisions or preference decisions? Why?Unit 3 IP Based on the following information, calculate net present value (NPV), internal rate of return (IRR), and payback for the investment opportunity: (750-1,000 words) EEC expects to save $500,000 per year for the next 10 years by purchasing the supplier. EEC’s cost of capital is 14%. EEC believes it can purchase the supplier for $2 million.Answer the following: Based on your calculations, should EEC acquire the supplier? Why or why not? Which of the techniques (NPV, IRR, or payback period) is the most useful tool to use? Why? Which of the techniques (NPV, IRR, or payback period) is the least useful tool to use? Why? Would your answer be the same if EEC’s cost of capital were 25%? Why or why not? Would your answer be the same if EEC did not save $500,000 per year as anticipated? What would be the least amount of savings that would make this investment attractive to EEC? Given this scenario, what is the most EEC would be willing to pay for the supplier?Prepare a memo to the President of EEC that details your findings and shows the effects if any of the following situations are true: (1,500–2,000 words) EEC’s cost of capital increases. The expected savings are less than $500,000 per year. EEC must pay more than $2 million for the supplier.
Our website has a team of professional writers who can help you write any of your homework. They will write your papers from scratch. We also have a team of editors just to make sure all papers are of HIGH QUALITY & PLAGIARISM FREE. To make an Order you only need to click Ask A Question and we will direct you to our Order Page at WriteDemy. Then fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Fill in all the assignment paper details that are required in the order form with the standard information being the page count, deadline, academic level and type of paper. It is advisable to have this information at hand so that you can quickly fill in the necessary information needed in the form for the essay writer to be immediately assigned to your writing project. Make payment for the custom essay order to enable us to assign a suitable writer to your order. Payments are made through Paypal on a secured billing page. Finally, sit back and relax.
About Wridemy
We are a professional paper writing website. If you have searched a question and bumped into our website just know you are in the right place to get help in your coursework. We offer HIGH QUALITY & PLAGIARISM FREE Papers.
How It Works
To make an Order you only need to click on “Order Now” and we will direct you to our Order Page. Fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Are there Discounts?
All new clients are eligible for 20% off in their first Order. Our payment method is safe and secure.