StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...

Two Options Available for Claires Antiques - Assignment Example

Cite this document
Summary
This paper evaluates the two options available for Claire’s Antiques. The first alternative is the North Warehouse which will have a total investment cost of $1, 500, 000.00. Option 2 is the West Warehouse which requires $1,700,000.00 cash outlay.    …
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER94.6% of users find it useful
Two Options Available for Claires Antiques
Read Text Preview

Extract of sample "Two Options Available for Claires Antiques"

Download file to see previous pages

It should be noted that as the company currently has a level limited of resources, only one of these alternatives will be chosen. To aid in the decision making, this presentation will utilize a Net Present Value (NPV) analysis to the projected cash flows of both projects. Considering that the cost of capital may vary from Claire’s antique expectations, we will also employ sensitivity analysis to look at the value of the two alternatives’ NPVs in the different cost of capital. The presentation will first lay out its assumptions before proceeding with the evaluation of the given alternatives.

It will conclude with its findings and recommendations. Assumptions The computations will generally use the data from the research conducted by the private firm. Table 1 shows the data gathered from the research. We will further assume that the risk-based cost of capital is 10% and that the project has a tax rate is 40%. Also, the company will be using a straight-line depreciation method to adjust the book value of the facility. Another assumption is that the company will be using either North or West Warehouse for five years, after which the facility will be sold in cash in its book value or salvage value.

Also, this presentation assumes the depreciation expense is not yet included in the presumed annual fixed costs. Evaluation of Option 1: North Warehouse NPV is used in capital budgeting to analyze the profitability of an investment or project. NPV is the difference between the present value of cash inflows and the present value of cash outflows (Net Present Value 2006). If the NPV is positive, the investment is accepted. In contrast, negative NPV means that a project is not profitable. The evaluation of the alternatives begins with the laying out of the expected cash flows.

In an NPV analysis, cash outflows and inflows are further discounted to take into account the time value of money. After that, the NPVs of the two options are compared.     

...Download file to see next pages Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(Two Options Available for Claires Antiques Assignment, n.d.)
Two Options Available for Claires Antiques Assignment. Retrieved from https://studentshare.org/management/1506073-claires-antiques-essay
(Two Options Available for Claires Antiques Assignment)
Two Options Available for Claires Antiques Assignment. https://studentshare.org/management/1506073-claires-antiques-essay.
“Two Options Available for Claires Antiques Assignment”, n.d. https://studentshare.org/management/1506073-claires-antiques-essay.
  • Cited: 0 times

CHECK THESE SAMPLES OF Two Options Available for Claires Antiques

Type of Service of Claires Antiques

There are a few other options available to the company; they could submit an older bid which they have used for other orders.... When Claire's antiques, made the bid they were not aware of the competition and the bid the competition would make.... The bid that Claire's antiques made was for $650 for 150 clocks which brought the total to $97,500.... hellip; When Claire's antiques, made the bid they were not aware of the competition and the bid the competition would make....
2 Pages (500 words) Case Study

Business and Corporate Law: Analysis of Lorraine and Brenda Case

However, all the assets of the business will be available to creditors of the business, and therefore, you should be very aware that any assets you transfer to the business will not be protected by the principle of unlimited liability and will be available to creditors should the business fail.... The Act allows two or more persons to form a company with limited liability for any lawful purposes by following the formal requirements of the Act2....
13 Pages (3250 words) Case Study

Marketing of Art Products

These art festivals serve as a platform for new artists and also from a social perspective transform places and settings into environments thriving with the production and processing ad even consumption of the very essence of culture which seem to be available within a specific location....
6 Pages (1500 words) Assignment

International Marketing Feasibility

In this consideration, the company background is discussed.... Moreover, its vision, mission and goal are also discussed.... In line with its operation in Thailand… nd the Industry it proposes to operate, the environmental analysis of the country and the related industry have been analyzed using the environmental analysis including political, economical, social, and legal environment. The result of the analysis shows that there is a great The government's encouragement of foreign investment would fast tract legal actions that may enhance the speed of operation....
25 Pages (6250 words) Essay

Introduction to Law

The same had been claimed by him to be a rare piece of 17th century and thus valued it at £50,000.... Stewart was attracted in buying the clock as… Finally, he consulted with Hill who was a specialised in restoration of old English clocks.... Hill, based on the explanation provided by Stewart, suggested that the deal will be profitable and can purchase the product....
8 Pages (2000 words) Essay

Her Majesty's Revenue and Customs Framework

Generally, Great Britain and Hodge (2014) explains that the HMRC considers an organization or a company ‘active' for purposes of Corporation Taxes when it starts carrying on a business activity, receives income or is trading.... On the other hand, the HMRC may consider an… Moreover, HMRC may also deem an unincorporated organisation as trading or active in which case it is supposed to comply with some corporation taxes....
9 Pages (2250 words) Essay

Hubert de Givenchy

Analysis of the literature available on this designer indicated that his family already belonged to an artistic background that is one of the factors of Givenchy's inspiration from the childhood (The Columbia Encyclopedia, 2009).... hellip; During the 1950s and 1960s, only two women dominated the market segment of the fashionable fleet of Givenchy particularly.... In this regard, during these two decades, Givenchy only made fashionable clothes and accessories for Jacqueline Kennedy, wife of the US President and Audrey Hepburn, a famous Hollywood Actress....
5 Pages (1250 words) Case Study

The Capital Gains Tax

a parcel of land, a building, shares of company stocks, antiques, jewelry or an enterprise) at a profit.... This report "The Capital Gains Tax" focuses on the amount paid by a taxpayer for selling capital goods at profit.... CGT is also defined as the tax that is charged on any gain resulting when a chargeable person makes chargeable disposal of a chargeable asset....
8 Pages (2000 words) Report
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us