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Essay about Euroland Foods S.A.

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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

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