Firm Financial Analysis Project: Part VI Your Firm Financial Analysis Project (P

Firm Financial Analysis Project: Part VI
Your Firm Financial Analysis Project (Parts I-VI) is due Saturday by 11:59 pm CT 
Using the principles and tools outlined in the textbook, complete a Capital Structure Analysis, Capital Budgeting Analysis and form Funding Growth Strategies for the Firm. You must also compile a bibliography and list of data/sources.
Part VI: Capital Budgeting Analysis, Capital Structure Analysis and Funding Growth Strategies, and Bibliography and Data (due Week 8)
Capital Budgeting Analysis (30 points): You have been asked to evaluate a potential acquisition of a smaller privately owned competitor. The acquisition candidate produces an EBITDA of 10% of your current EBITDA and is offered to your firm at a price of multiple of 8 times EBITDA. Assume the following:
Current debt costs you 8% and      you can raise additional debt at this rate today. The loan is to be      amortized over 7 years.
Current return on equity is 15%
Current WACC is 10%
Tax rate is 30% (constant)
80% of the purchase price is      considered depreciable assets – to be depreciated over ten years on a      straight-line basis with no residual values.
Residual value for this      operation is to be 2x current EBITDA in year ten.
Create an after-tax cash flow analysis to answer the following:
Economic analysis: is this a      fundamentally sound investment?
Using the tax cash flows and no      debt (pure equity), is the prospect a positive NPV using ROE as the hurdle      rate?
Using the after tax cash flows      and the firm’s WACC, is this project desirable? Explain how you came to      this conclusion.
Capital Structure Analysis and Funding Growth Strategies (80 points): Imagine your firm has some attractive investment opportunities that it is considering. The capital budgeting process has been completed and found that these projects have a positive NPV and are desirable. The firm must raise financing for the projects in the amount equal to 5% of the current level of its total assets. As you know, these funds can come from a number of sources: operations, short-term debt, long-term debt (new bond issues), or equity (new stock issues).
Your task is to decide where funds for these projects should come from based on your knowledge of the firm and your knowledge of the current state of the economy (i.e., level of interest rates, state of the stock market, future prospects for the economy/firm). This section is worth 80 points. Your analysis should answer the following questions:
How much must your firm raise      for the investments to be undertaken?
How will you determine where      the funds should come from? Provide analysis for the following areas:
Current capital structure of       the firm, specifically, you must cite how some of the ratios you       calculated in Part II will influence your decision.
Federal Reserve policy and       interest rates, meaning what are current borrowing interest rates and       what direction do you believe these will trend in the near future?
Stock price and state of the       stock market, meaning are current stock prices high? Low? How could a       firm’s financing choice(s) be impacted?
Working capital policy
Profit/loss situation and       operating cash flows
Bibliography and data compilation (20 points): to complete submission requirements, compile a detailed bibliography and index of the data and sources you’ve collected for the project.

Management homework help

Place your order
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more