Worldwide Paper Company Case Write Up

Words: 1111
Pages: 5
Open Document
In the case of Worldwide Paper Company we performed calculations to decide whether they should accept a new project or not. We calculated their net income and their cash flows for this project (See Table 1.6 and 1.5). We computed WPC’s weighted average cost of capital as 9.87%. We then used the cash flows to calculate the company’s NPV. We first calculated the NPV by using the 15% discount rate; by using that number we calculated a negative NPV of $2,162,760. We determined that the discount rate of 15% was out dated and insufficient. To calculate a more accurate NPV for the project, we decided to use the rate of 9.87% that we computed. Using this number we got the NPV of $577,069. With the NPV of $577,069 our conclusion is to accept this …show more content…
Using Tables 1.1-1.5 to generate a total of all cash flows (Table 1.6), we can then find WPC’s Net Present Value and the Internal Rate of Return for this particular project. Using WPC’s present hurdle rate of 15% we see that the project has a negative NPV of $2,162,760. Under this calculation the project would definitely be turned down. But, under the recently calculated hurdle rate of 9.87% the project would have a NPV of $577,069, and would be readily accepted by WPC. Also noted in Table 1.6 is the Internal Rate of Return for the project of 11%. We feel that the Net Present Value model is the superior decision making tool when evaluating this project because it correctly uses WPC’s cost of capital to discount the projects cash flows.
If there was uncertainty with some of the inputs for the project it would be easy to show what would happen if the inputs were adjusted in Tables 1.1-1.6. By changing the various inputs we could demonstrate different outcomes generated by the changing values. Regardless of the fluctuating input values we feel confident that the newly calculated Weighted Average Cost of Capital will determine the projects correct NPV. All of the inputs used will be very influential but we feel that sales revenues, operating costs, net working capital, and the discount rate are the most important. Sales in the shortwood market would be the major contributor to revenues of the new project and if the sales in that market go flat then the projected
Show More

Related Documents: Worldwide Paper Company Case Write Up

Macro Economic Analysis of Coca Cola Essay

research paper examples, term papers, example dissertations, writing tips and writing guidelines for high school, college and university students. Here you can also find information about custom writing services at which you can buy custom written papers online. This Blog Linked From Here | This Blog | | Top of Form Bottom of Form Linked From Here | | Thursday, December 30, 2010 Research Paper on Coca Cola Research Paper on Coca Cola Company Introduction The Coca-Cola Company Limited…

Words 4049 - Pages 17

Ups( Management System) Essay

Systems in Global Business Today Case 1: UPS Global Operations with the DIAD IV Tags: UPS global operations; handheld computers; wireless mobile platform; digital firm; integration of business; customer value generation. Summary How IT drives the UPS operation worldwide. Using smart people and smart technology, UPS delivers over 14 million packages daily to 200 countries and territories, requiring the talents of 70,000 drivers who are wirelessly connected to UPS main databases located in seventeen…

Words 1029 - Pages 5

Essay on Facebook Case Analysis

Case Study: Facebook | Introduction Recently, the social networking sites are getting much more popular on the internet. They are playing a vital role in the way that individuals can easily create their own online profiles, construct their identities and help communicate with each other. Literally, there are many social networking sites worldwide; however, Facebook is the most well-known one since the number of its visitors is significantly increasing. Historically, Facebook was founded almost…

Words 1825 - Pages 8

Gillette： Why Innovation May Not Be Enough Essay

Synopsis: Gillette has long been known for innovation in both product development and marketing strategy. In the highly competitive, but mature, razor and blade market, Gillette holds a commanding worldwide market share. The peak of its innovation occurred in 2006 with the introduction of the Fusion 5-bladed razor. Today, innovation in razors and blades is thwarted by a lack of new technology and increasing consumer reluctance to pay for the “latest and greatest” in shaving technology. Gillette must…

Words 5568 - Pages 23

Forum Discussion Activities

questions in the Forum by Wednesday, midnight, of Week 3. Then please post at least three responses to other student’s postings by Saturday, midnight, of Week 3. * You are the Vice President of a US based software company. You have been tasked with exploring the possibility of setting up a software development operation in India. You have heard that the rigid caste systems can affect business operations. Do you think it is possible to use a typical US management style in India or should you adjust…

Words 2427 - Pages 10

Essay on E Books Case Analysis

E-Book’s Case Table of Content Introduction ..……………………………………………………………………………… 2 Crafting a Strategy………………………………………………………………………... 3 The Business Model ………………………………………………………………………. 3 The Platform ……………………………………………………………………………… 4 Key Success Factors (KSF) ………..……………………………………………………… 4 Evaluating a Company’s External Environment ……………………………………….. 6 The Five Forces Model of Competition ………………………………………………….. 6 The Industry …………………………………………………………………

Words 3225 - Pages 13

Creativity in the Workplace Essay

innovator in any competitive market. Today’s top leading companies did not become successful by simply “getting a job done”. A successful organization reaches full potential when things get creative. Creativity sparks new ideas, which in turn sparks innovation. I think that creativity is an important human resource in today’s job market, and it is important to understand how creativity is fostered in leading organizations. Purpose of the Research Paper As a recent college graduate, it was harder than…

Words 2680 - Pages 11

A Recent Stumble In The Fall Of Modern Moral Capitalism

government paying out large sums of money to companies, corporations and other organizations in the form of a bailout is nothing new. In fact, we can trace it back nearly to the birth of the United States of America (Hunnicutt 18). But why does it seem to be, especially in the light of more recent economic dilemmas, a necessary evil? Why does our system tend to bottleneck now and again into a dead-end with no other foreseeable solution? This paper begs these questions and attempts, through a…

Words 2545 - Pages 11

An Analysis of Cisco Systems Essay

Competitive Advantage Mira Vissell ISM 158 Business Analysis Paper March 4th, 2004 Table of Contents Objective Section I: Industry Summary: An Analysis of Network Equipment Industry A. Industry Profile B. Competitive Strategies within the Industry C. Porter Model Evaluation of Industry Forces D. Globalization of the Industry E. Importance of Information Technology in the Industry Section II: Company Perspective: An Analysis of Cisco Systems A. Cisco Systems profile B. Market and…

Words 8805 - Pages 36

Archetypes In The Hunger Games

Money, authenticity, and trying to stay afloat in a flooded market are the three main reasons corporations present products how they do. The Hunger Games has influenced it's audience through stereotyping and archetyping in order to increase profit for Scholastic Incorporated and Lionsgate; which has lead to the series being rebranded to increase profits from the books to the movies. The Hunger Games is young adult novel written by Suzanne Collins and published by Scholastic inc., then later made…

Words 1847 - Pages 8