Worldwide Paper

In: Business and Management

Submitted By chulinh
Words 658
Pages 3
EXECUTIVE SUMMARY
Worldwide Paper Company Longwood Woodyard Proposal

Blue Ridge Mill is considering the addition of a new on-site longwood woodyard in 2006. This proposal is expected to gain two primary benefits during its 6 years economic life: to bring substantial cost saving by eliminating the need to buy shortwood from outside suppliers and produce its own shortwood to sell in open market. After executing detailed and sensitivity analysis, the project is expected to create value for shareholders at Worldwide Paper Company. The valuation method for the project is forecasting the future free cash flows generated from the project and calculating its net present value (NPV). This project has a positive NPV of $936,147, and an internal rate of return (IRR) at 11.44% which is larger than the company’s weighted average cost of capital (WACC) at 9.85%. Consequently, the investment is expected to be able to maximize shareholders’ wealth by generating positive future cash flows.
The WACC of the company is estimated based on its cost of debt and cost of equity. After tax cost of debt is computed from the bank loan rates (LIBOR +1%) at 6.38% and 10-year-bond rate at A rating at 5.78%. Cost of equity is based of the 10-year US government bonds rate at 4.60%, historical average of market risk premium at 6.0% and beta at 1.1 because these data are considered most relevant to the company. Capital structure weights of the company is based on market value. Specifically, equity value is computed by taking the average price per share over the last year at $24/share. WACC is estimated at 9.85%.
Future cash flows are estimated with the assumption that revenues created by the investment by supplying shortwood start in 2008 at $4 million and $10 million per year from 2009 to 2013. Operating costs are at 80% of revenues. By taking inflation into consideration, sales increase…...

Similar Documents

Dell Inc in 2008 Can It Overtake Hewlett Packard as the Worldwide Leader in Personal Computers by Thomson Essays and Term Papers

...Dell Inc. in 2008: Can it overtake Hewlett-Packard as the Worldwide Leader in Personal Computers? Dell is a global company that delivers products and services in more than 190 countries and over 40000 employees who live and work on six continents. The company deals in enterprise computing products, desktops, monitors, printers, notebooks, handhelds, software and peripherals with a focus on fully integrated improved environmental performance into business. The company had gone through many ups and down from its inception in 1984 and has to face many challenges and competitions to stay ahead in the market (Kolter and Lee, 2008). This paper strategically discusses the fall and rise of Dell Inc from 2007 to 2008 and to compare Dells strategy with that of Hewlett Packard with due reference from the case study “Dell Inc in 2008: Can it overtake Hewlett Packard as the worldwide leader in personal computers.” A) Dell’s Strategy to overcome HP in Personal Computers Michael Dell founded the company with simple vision and business concept that the personal computers could be built and sold directly to the consumers which would eliminate the additional costs of intermediaries between the company and consumer and thus reducing the overall cost of the PCs making it cheaper than other PCs in the market. The other advantage was that it reduces the costs and risks associated with carrying large stocks of parts, components and finished goods (Thompson and Gamble, 2006). The company......

Words: 318 - Pages: 2

Aeg Worldwide

...numerous sporting facilities in the United States with such arenas as the Staples Center in Los Angeles, Prudential Center in Newark and the America Airlines Arena in Miami under its control. AEG developed and operates the Home Depot Centre in Carson Los Angeles “it is the official U.S Olympic training site that features elite facilities for soccer, tennis, track and field, track cycling, boxing, lacrosse, rugby, football and other sport. The Home Depot Center also hosts concerts and family shows and is the home of the Major League Soccer’s Los Angeles Galaxy and Chivas USA” (Anschutz Entertainment Group, 2012). It is also the national training center for both the Men and Women national soccer teams. AEG also controls many facilities worldwide, in Europe in controls the O2 area in London and the O2 World arena in Berlin, The Hamburg Arena in Hamburg, the Ahoy arena in Rotterdam and the Globe Arena in Stockholm. In Asia it controls the Wukesong Arena in Beijing and the Qatar National Convention Center in Doha. AEG also controls Acer Arena in Sydney Australia. AEG owns a share in an impressive number of sports teams around the world and has a firm grip some of the largest sporting franchises and various sports. AEG part owns the Los Angeles Galaxy, Houston Dynamo’s Major League soccer teams and the Hammarby soccer club which is the most popular soccer club in Stockholm and among the most popular soccer clubs in Sweden (Anschutz Entertainment Group, 2012). AEG part owns......

Words: 333 - Pages: 2

The Worldwide Benefits of Organizational Theory

...The Worldwide Benefits of Organizational Theory  David Thurman COMM / 112 January 15th, 2012 Dr. Dmitriy Voloshin THE WORLDWIDE BENEFITS OF ORGANIZATIONAL THEORY Organizational Theory is the key to solving many of the problems in modern society. It is a practice that, at its core, is used for the benefits of people and the betterment of groups of people operating towards a common goal (Greenwood, Miller, 2010). These groups of people can include businesses, neighborhoods, nations…anything. The reach of the Theory is broad and when it is executed correctly it can have a monumental level of effectiveness, ideally a positive one (Greenwood, Miller, 2010). The concept of Organizational Theory is far from new, and as such, this proposition is not meant to propose a new idea so much as make the reader aware of the often overlooked and underexploited potential of Organizational Theory and the power it can have in relation to improving conditions of people the world over. In this paper, the basic definition of Organizational Theory will be explained, its importance will be asserted, and ways in which it can be used to advance the well being of many will be proposed. First, we must establish what Organizational Theory actually is. The idea of “Organizational Theory” is defined as the study of organizations (a social group which distributes tasks for a collective goal) for the benefit of identifying common themes for the purpose of solving problems, maximizing...

Words: 1821 - Pages: 8

Worldwide Terrorism

...Worldwide Terrorism Terrorism is the systematic use of terror, often violent, especially as a means of coercion. The word terrorism is politically and emotionally charged and has been practiced by a broad array of political organizations to further their objectives. When here about these terrorist attacks, I have always wondered when terrorism started, how terrorist groups are funded and what motivates a terrorist group to do these horrible acts. September 11th, 2001, I am a sophomore in high school. The bell rings for students to go to lunch, so as I walk down the hall and turn the corner, at a distance I hear the craziest thing “Dude I heard a plane hit a building in New York!” Immediately I think nothing of it so I grab my lunch and sit in the patio. Five minutes later, my friend turns on the TV and what I brushed aside earlier was happening right before my eyes. The history of terrorism goes back as far as the beginning of the 1st century AD. A Jewish extremist group known as Sicarii Zealots was very active in the Judaea Province. According to Josephus in 6 AD, Judas of Galilee formed a small offshoot of the Zealots. But the term originally was used to describe the actions of the Jacobin Club during the Reign of Terror in the French Revolution. The question of how terrorist organizations are funded has been a real mystery to me. A few friends and I talked about it on many separate occasions. I thought that maybe the funding came from drug lords or even kidnapping for...

Words: 538 - Pages: 3

Worldwide Chemical

...Case Study: Worldwide Chemical Company BUSN 6110 – Operations Management Webster University Problem: Worldwide Chemical Company, manufacturers of polymer fiber and flake is suffering chronic production equipment failures causing significant output shortfalls, losing business to competitors. Facts: ▪ Because unreliable equipment made on-demand production too risky to attempt, the response to seasonal fluctuations in demand was to stockpile inventory for months. ▪ Equipment problems affected first-run quality, resulting in wasted product and further production delays. ▪ The production manager refused requests by the maintenance manager to halt production for scheduled equipment maintenance, but became belligerent when breakdowns occurred. ▪ Maintenance personnel were underutilized until a failure halted production, then would be called as “firemen” to repair equipment, sometimes working round the clock to do so. ▪ The plant manager had been repeatedly called on the carpet by corporate management for routinely missing production goals. ▪ Employee morale was very low due to rumors of plant closing for chronic production goal shortfalls. Assumptions: In any business, excess inventory is waste, and this company has adopted this wasteful practice. When an equipment failure halts or significantly decreases production, replacement parts are needed ASAP, so confiscatory rates for super-expedited shipping are being paid. All employees are assumed to be......

Words: 961 - Pages: 4

Worldwide Hospitality Industry

...Aleena Iqbal The Worldwide Hospitality Industry Hospitality and Travel FdA Hospitality and Travel Management The Worldwide Hospitality Industry Module Code: YCUT400006 Learner Name/Number: Aleena Iqbal/10451742 Tutor Name: Clare Dodsley Date: 9th April 2014 Introduction What is the Hospitality Industry? Hospitality in itself means kindness in welcoming guests or strangers and Barrows and Powers (2008, p5) suggest it is an industry that is broad and varies ranging from single-person organisations such as Restaurants and Bars to worldwide corporations. The Industry includes many different sectors within it including Food & Beverage, Accommodation as well as the Travel and Tourism sector. According to People1st State of The Nation Report (2013, pp.24-25) the industry has more than 80 different jobs to offer and as a whole currently employs 2,076,000 people, where Restaurants remain the largest employed sector. Unfortunately, over the recent years, some issues have been encountered within the hospitality Industry including Customer Loyalty, Information Technology (IT) and Recruitment and Retention, which have had a negative impact within the industry as a whole. Hence, this review will attempt to identify and analyse these current issues, developments and potential trends in the Hospitality Industry, exploring possible......

Words: 3993 - Pages: 16

Precision Worldwide

...This case could have gone the other way had this information been made available. 15.963 [Spring 2007] Managerial Accounting & Control 18 Precision Worldwide 15.963 [Spring 2007] Managerial Accounting & Control 19 Precision Worldwide „ „ „ What are the alternatives? Stay out of plastic rings? More a question of timing – when to sell plastic rings. Never selling plastic rings does not seem like a viable option. „ „ Stop selling steel rings? What is the earliest stop date? „ „ Sell steel rings until plastic rings available. Dispose of remaining steel rings and steel inventory? Stay out of plastic rings until all steel ring inventory is sold? Dispose of steel inventory. 15.963 [Spring 2007] Managerial Accounting & Control 20 Precision Worldwide „ „ „ Manufacture more steel rings with excess labor in the Summer? Continue to manufacture more steel rings in the Fall until all steel inventory converted. Sell plastic rings only in France. Continue to sell steel rings in other markets? 15.963 [Spring 2007] Managerial Accounting & Control 21 Precision Worldwide „ „ What are the relevant costs in Table A? Is the allocated fixed overhead relevant? 15.963 [Spring 2007] Managerial Accounting & Control 22 Precision Worldwide Elimination of Applied Fixed Overhead Item Selling Price Material Direct Labor Direct Overhead Administrative Overhead Variable Cost Contribution......

Words: 2118 - Pages: 9

Worldwide Telecommunications

...Worldwide Telecommunications Team,”C” Joseph Collins, Megan Ward, Andrew Hoffart, Steven Rankin, Cheryl Bandy COMM/215 April 28, 2014 Irwin Shubert Worldwide Telecommunications, Inc. and the cultural changes within Diversity has brought a new importance to the work place. With the world becoming more diverse, and the work place becoming more multicultural, political correctness, affirmative action and disparities in pay pushed their employers to change their recruiting practices. A progressive workplace should consist of employees of wide-ranging cultures, ethnicities, religions, genders, and ages, and other factors. When you add people from the different backrounds there’s always going to be tension. However, each individual from each different culture or reign can bring something different, something new and exciting to the table.  Worldwide Telecommunications, Inc. is meeting this rather complicated issue directly in the hopes of turning it into an opportunity to promote a multicultural work environment that its customers can connect with. The various cultures of the workers will have an effect on the way that the community understands and interacts with the organization in an affirmative way. This distinctive idea will not be without its difficulties. A diverse workplace can lead to challenges and struggles as people from different cultures, ethnicities, religions, genders, and ages learn to work......

Words: 1430 - Pages: 6

Movies Worldwide

...viability of the local films is the fact that local films often require an extra “pitch” to be able to captivate the attention of the consumers. The majority of the local films often have budget limitations that make it impossible to employ big stars, use advanced visual effects and extensive marketing – with the consequence of having less mass appeal. To compensate for this, local producers are often forced to make films without these resources and create a “different” movie to gain attention, but without directly challenging Hollywood movies. A good example is the development of the Italian film industry after the World War II, in lack of financial resources producers used non experienced actors and created a legacy for Italian movies worldwide. To summarize, there are many challenges for the local film industries, but it still attracts consumers. In our opinion, local producers should not necessary aim for the international success. In fact, as implied by the author of “Face to Face with Hollywood”; “From the perspective of Hollywood, it makes little difference whether one is talking about the Indian cinema or the Dutch cinema, the French cinema or the Chilean cinema: none is a serious competitor for America’s domestic output, but each national cinema is a “market” for American films, while still keeping some place for the locals.”( p. 467, European Cinema: face-to-face with Hollywood ) [6] This way, international success is more a result than an objective, something......

Words: 3243 - Pages: 13

Hilton Worldwide

...HILTON WORLDWIDE Hilton Worldwide (Hilton) is a leading global hospitality company which was established in the year 1919 by its founder Conrad Hilton. Since then the company has expanded geographically, produced original hotel and travel concepts, and developed innovative technologies to enhance the guest experience. Their 93-year history as pioneers in the industry makes them the number one venue for travelers, developers, partners, and team members alike. The company was until recently known as Hilton Hotels Corporation. The new Hilton Worldwide is now owned by the private equity firm "The Blackstone Group". The name Hilton Worldwide signifies the company’s global breadth and reach. Hilton Worldwide retains a chain of hotels from luxurious full-service hotels and resorts to extended stay suites and mid-priced hotels. This means that Hilton Worldwide is mainly focused on the lodging sector. One of the world's largest hoteliers is operated by Hilton. This includes a lodging empire of over 3,900 hotels and resorts in almost 91 countries. The company provides services that include lodging rooms, health and fitness facilities, and meeting facilities, dining options, swimming pools, exercise facilities, laundry facilities and spa treatments. Hilton operates and maintains a trusted portfolio of brands such as, Waldorf Astoria, Conrad, Doubletree, Embassy Suites, Hilton Garden Inn, Hampton Inn & Suites, and Homewood Suites etc. Additionally, the company also......

Words: 3208 - Pages: 13

Multicultural Workforce-Worldwide Telecommunications

...Final Research Paper-Multicultural Workforce COMM/215 December 1, 2014 Introduction-Worldwide Telecommunications Company Globalization is a process of interaction and integration among the people, companies, and governments of different nations. It is driven by international trade and investment and aided by information technology (The Levin Institute, 2014). Indeed, globalization has made our world smaller. As the markets for products, services, labor, and capital increasingly integrate worldwide, we are witnessing the increasing economic, cultural, demographic, political, and environmental interdependence of different locations around the world (Elfrink, 2014). In his book The World Is Flat, Thomas Friedman perfectly captured the essence of today’s new era of globalization. By flat, Friedman meant that the world is connected. The lowering of trade and political barriers, and the exponential technical advances of the digital revolution have made it possible to do business or almost anything else, instantaneously with billions of other people across the planet (Friedman 2005). However, with a more global business environment comes a host of new challenges including managing a multicultural workforce comprised of people with widely differing backgrounds. In a multicultural environment, where the meanings of various behaviors and practices are as diverse as the people demonstrating them, incorrect assumptions could easily lead to miscommunication (Lankard, 1994). ......

Words: 2305 - Pages: 10

Hilton Worldwide

... Hilton worldwide Financial analysis: With the initialization of the company in the year 1919, it made a really good start and took out a lot of contemporary competitors during the period of the 20th century. By the end of the year 2013, Hilton worldwide underwent a drastic financial enhancement and there was an increase of 5.2 percent on the overall revenue for each and every room. In addition to that, the overall adjusted EBITDA was increased to a height of 13 percent. This was absolutely a huge financial enhancement for the company as it led to the generation of $2.21 billion as overall net unit growth and the overall unit growth was increased to 4.5% in the segment of management and Franchise. To establish a certain financial position in the commercial market, a company requires certain factors to be accomplished to attain the targeted financial objective. These factors include, setting up a common mission, a specific set of values and lastly proper strategic priorities. It was important for the company to shift into a capital centric model strategy that will allow making progress with less investment in keeping their focus on the global development strategy. The key step that was beneficial for the company was the performance driven work culture. Another important factor in the tourism and hospitality industry is the diversification. In simple terms, the global reach of a company also provides an estimate over the financial condition of it. The more global a......

Words: 676 - Pages: 3

Precision Worldwide

...9-197-103 REV: MAY 21, 2004 WILLIAM J. BRUNS, JR. Precision Worldwide, Inc. In late May 2004, Hans Thorborg, the general manager of the German plant of Precision Worldwide, Inc. (PWI), scheduled an afternoon meeting with his sales manager, accountant, and development engineer to discuss the introduction by the French firm Henri Poulenc (a competitor) of a plastic ring substitute for the steel retaining rings presently used in certain machines sold by Precision Worldwide. The plastic ring, new to the market, not only had a much longer life than the PWI steel ring but also apparently had a much lower manufacturing cost. Thorborg’s problem stemmed from PWI’s large quantity of steel rings on hand and the substantial inventory of special steel that had been purchased for their manufacture. After a thorough survey, he had found that the special steel could not be sold, even for scrap; the total book value of these inventories exceeded $390,000. For nearly 90 years PWI had manufactured industrial machines and equipment for sale in numerous countries. The particular machines involved in Thorborg’s dilemma were made only at the company’s plant in Frankfurt, Germany, which employed more than one thousand people. The different models were priced between $18,900 and $28,900 and were sold by a separate sales organization. Repair and replacement parts, which accounted for a substantial part of the company’s business, were sold separately. As with the steel rings, these parts could......

Words: 1480 - Pages: 6

Precision Worldwide

...Precision Worldwide Inc. Precision Worldwide, Inc. (PWI) has a plant located in Germany which manufactures industrial machines, equipment and replacement parts for sale in numerous countries. Repair and replacement parts, which accounted for a substantial part of the company’s business is now facing a dilemma, a new competitor has entered the market with a replacement part, a plastic ring, which PWI had in the past used a special steel to produce. During a meeting with the general manager, Hans Thorborg, the general manager of PWI’s plant in Germany, wanted to discuss with his sales manager, accountant and development engineer the introduction of the competitor, a French firm Henri Poulenc and the plastic ring substitute they produce (Bruns, 2004). The plastic ring produced by Henri Poulenc is created at a fraction of the cost of the steel rings that PWI currently produces, and was found to last four times longer than the steal ring (Bruns, 2004). Many strategies were discussed by PWI’s management team on how to respond to this new competitor along with discussions regarding what to do with the special steel the company has on hand. Analysis The main topic of discussion and concern is the company losing on profits if they do not begin manufacturing their own plastic ring. Which leads to the next questions how to market and price a new line of plastic rings and the big question what to do about the special steel they use to produce steel rings. If PWI sells on a new line......

Words: 1119 - Pages: 5

Worldwide Communications

...Worldwide Telecommunications, Inc. Worldwide Telecommunications, Inc. is a full service voice and data communications company. The company is one of the world’s largest and successful telecommunications companies. Despite the success that Worldwide Telecommunications, Inc. had experienced, the company will eventually face some cultural changes in the future. Also, a diverse workforce will have an effect on teamwork as well as communication. However, Worldwide Telecommunications, Inc. is not the only large company that will come across cultural changes. Nowadays, the trend for many companies is to expand into another country with the goal to gain a diverse workforce and to enter an international market. Although this trend is extremely beneficial for the company’s success and survival, there are some negative aspects as well. Possible Cultural Changes in Worldwide Telecommunications, Inc. The world is becoming more diverse and most large companies are multicultural. Diversity definitely has brought new importance to the workplace. Because of the increase of diverse employees from all over the world, it is almost impossible for Worldwide Telecommunications, Inc. to not counteract any cultural changes. Combining people from different backgrounds can cause tension in the workplace. People of different nationalities, ethnicities, religions, genders, ages, etc. interact with each other differently and perceive things in different ways. In addition, the......

Words: 2156 - Pages: 9