Case Study of Euroland Foods S.A. The case of Euroland Foods S.A. is about a multinational company that produces high-quality ice cream, yogurt, bottled water, and fruit juices. Euroland Foods was founded in 1924 by Theo Verdin. The performance of the company was steady over the years, but since 1998 to 2000 the company had no growth. The management team thought that was because of the low population growth in northern Europe and market saturation in some areas. The management team hoped that increase in market share and sales would help company growth. Eurplamd food has a senior management committee meeting at every beginning of the year. The meeting will help company’s board director to decide the new capital budget in this year. …show more content…
Overall, the ranking lists shown that the project of Strategic Acquisition should be accept by the board directors, because it has a highest IRR and NPV, the second high Profitability Index and 5 years payback, although the initial investment is really big but still the return is worse to do. The total investment of this project will be EUR55 million. The second recommend project will be the project of Southward Expansion. This project has a high IRR and NPV, the initial investment is EUR30 million, it is the 3rd in the ranking list of Project Spending and it is the 2nd in the ranking list of Project Net Cash Flow about EUR56.25 million, The payback is 5 years too. Because the project of Effuent-Water Treatment at Four Plants is highly recommend so right now we have total capital budget EUR91 million. Based on all the ranking list, the project of the Artificial Sweetener will be the last recommendation for the new year capital budget. This project has the 3rd highest IRR and NPV, the return is the 4th in the list about EUR42.75 million and payback is also 5 years. They expenditure for this project is EUR27 million. So the total budget will be EUR118 million include Strategic Acquisition, Southward Expansion, Artificial Sweetener and Effuent-Water Treatment at Four Plants. Type of project | Minimum Acceptable IRR | Maximum Acceptable Payback Years | New product or new markets | 12% | 6 years | Product or market extension | 10% | 5
Star Appliance is looking to expand their product line and is considering three different projects: dishwashers, garbage disposals, and trash compactors. We want to determine which project would be worth doing by determining if they will add value to Star. Thus, the project(s) that will add the most value to Star Appliance will be worth pursuing. The current hurdle rate of 10% should be re-evaluated by finding the weighted average cost of capital (WACC). Then by forecasting the cash flows of each project and discounting them by the WACC to find the net present value, or by solving for the internal rate of return, we should be able to see which projects Star should undertake.
Team then commenced to apply some of the budgeting concepts discussed in class. First, NPV was calculated using the NPV function in Excel - approximately $419,000. In this calculation we found NPV to be a positive number thus indicating that the Super Project investment should be pursued by General Foods.
The present value of the net incremental cash flows, totaling $5,740K, is added to the present value of the Capital Cost Allowance (CCA) tax shield, provided by the Plant and Equipment of $599K, to arrive at the project’s NPV of $6,339K. (Please refer to Exhibit 4 and 5 for assumptions and detailed NPV calculations.) This high positive NPV means that the project will add a significant amount of value to FMI. In addition, using the incremental cash flows (excluding CCA) generated by the NPV calculation, we calculated the project’s IRR to be 28%. This means that the project will generate a higher rate of return than the company’s cost of capital of 10.05%. This is also a positive indication that the company should undertake the project.
(Assume that the amount of debt issued to reach the target debt-to-capital ratio is going to be maintained forever. Use the tax rates assumed in the attached Excel file).
When reviewing the situation that Nutritional Foods Inc. has been placed in. There are many facts that are pointed out in the case report that can be important when making an effective solution for the company. Including Nutritional Foods being the most successful of several companies in seeking to appeal to the mainstream market as well as to the niched consumer. In fact, the company’s success has led to its rapid growth, including the construction of its new processing facility. With Nutritional Foods growing in success and fame
Question 1: Based on your viewing of Food, Inc., how does your view of “farm-fresh” and other marketing messages that suggest a more organic flow of food products relate to the realities of 21st-century marketing channels for food?
projects are both savings the cost and time, especially the project ordering upgrade and the call center project. Whereas the Project Europa is bringing in the substantial revenues and it is increasing the revenues by 10 % and in this the company can meet its target of growth by 10 %, which has the weight-age of 35 points, and hence it is the most substantial target of the company in the given
Business environment is the combination of the surrounding of the elements of interest and influential to the business process. Business environment consists of mainly two types of factors – macro and micro. Under these two factors other verities of factors are involved. In this assignment environment of the Premier Foods is mainly examined along with the use of PESTLE analysis, social and cultural factors consideration are also discussed regarding branding decision.
An industry as complex as the Food and Non-Alcoholic beverages industry must be coded by organizing smaller sub-categories when referencing the Standard Industrial Classification (SIC) system and the North American Industry Classification System (NAICS). These systems categorize industries using codes to aid in analytical research for Federal statistical agencies. (United States Census Bureau, 2012). A quick search using key words or the actual code will allow the viewer to see the definition and characteristics of the industry. For example, Soft Drink Manufacturing can be found using the NAICS code 312111 or the SIC code 2086. Under the NAICS system, Soft Drink Manufacturing is defined as, establishments manufacturing soft drinks and artificially carbonated waters. (United States Census Bureau, 2012). The SIC code 2086: Bottled and Canned Soft Drinks and Carbonated Water, is located under Division D: Manufacturing, in the sub-category Major Group 20: Food and Kindred Products. By definition, this industry is comprised of manufacturing establishments that specialize in the production of canned or bottled soft drinks and artificially carbonated water, such as soft drinks, tea, or coffee. (Occupational Safety and Health Administration [OSHA], 2012).
Food Inc. opens in an American supermarket and draws attention to the unnatural nature of year-round tomatoes and boneless meat. It pulls aside the curtain that is concealing the truth about food from the consumer. After the brief intro, the movie shifts its focus to the topic of fast food and its impact on the meat industries. Fast food virtually started with McDonald’s. When they decided to simplify their menu and hire employees that repeated one task over and over for minimum wage, the result was the fast food phenomenon that swept the United States, and then the world. Today, McDonald’s is the largest purchaser of beef and potatoes in the United States, and is one of the largest purchasers of pork, chicken, tomatoes, and apples. Though
The next step of the project involved identifying and bifurcating the detail 's and basis of the project cost, compare the cost with similar projects and dеtеrminе thе phasing of еxpеnditurеs. Finally, thе financial analysis of thе company was done to dеtеrminе its viability and profitability. This analysis is basically required in thе dust free paper with sharp printing to analyst thе financial aspects of any capital investment projеct along with its technical feasibility and ratio analysis and also to the journal entries of receipts of the bills made.
The paper is about General Mills, evaluating the potential business opportunities in two countries, Greece and France. General Mills is a major food producer in the United States, and has some operations in Europe. France is a major European market while Greece is a minor European market. This paper will examine the business conditions within and between these two countries in order to provide advice for General Mills' management
The senior managers of Euroland Foods provided us with a wish list of eleven projects that they would like to see be part of the company’s capital budget. These projects would total €316M. You, the board of directors have imposed a capital rationing of €120M. We need to look at how to prioritize these eleven projects to determine which ones will have the biggest impact and create long term profitability for the company. Euroland did a good job of soliciting investment proposals from its managing directors. All the proposals provided a brief description and a combination of financial, strategic and qualitative reasoning for why the proposal
This case study views the CJ Foods, Inc. company headquarters in South Korea. CJ Foods make three types of sauces that they sell in grocery stores located in East Asia. The three types of Korean barbeque sauces are: Original, Pineapple, and Hot &Spicy. These sauces are made by mixing different percentages of five ingredients, and these ingredients include: beef, bean, pineapple, hot pepper, and sugar. For the original sauce the ingredients are twenty-seven percent beef, forty-seven percent bean, eleven percent hot pepper, and fifteen percent sugar. The pineapple sauce consists of ten percent beef, twenty-five percent bean, fifty percent pineapple, ten percent hot pepper, and five percent sugar. The hot and spicy sauce consists of fifteen percent beef, twenty percent bean, forty percent hot pepper, and twenty-five percent sugar. The profit contribution per pound for the original sauce is $1.55, for the pineapple sauce it is $2.10, and for the hot and spicy sauce it is $2.35. The case study is asking the reader to create a linear programming model, that will allow the company to use the available ingredients to maximize profit. The problem was identified by the data, because the cost of ingredients is not included in their profit analysis. The cost of the ingredients varies greatly, because of the commodity market.
The CP105 Patisserie of Bachelor of Culinary Arts and Business introduces students to practical techniques and theoretical skills, and also knowledge pertaining to traditional and contemporary patisserie techniques. Throughout the course students will increase knowledge, skills and passion for the art of pastry. There are two parts to the CP105 Patisserie assessment: Part 1 is a report that involves self-directed research and reflection on the evaluation of patisserie practices. Students are expected to conduct primary and secondary researches to gain knowledge about patisserie businesses. The researches should include critiques on efficiency and effectiveness of work practices over time and the rationale of uses, including market viability, and be able to make logical recommendations based on the research. The main objective of the report is to make comparisons traditional and contemporary patisserie practices and the reasons they have been adopted.