Roman Copy Of Greek Bronze Discus Thrower Discobolus

Roman Copy Of Greek Bronze Discus Thrower Discobolusgreece Boxer

Roman Copy Of Greek Bronze Discus Thrower Discobolusgreece Boxer

Roman Copy of Greek Bronze, Discus-Thrower (Discobolus) Greece, Boxer at Rest Essay #2 Images Slide 1 Milestone 2: Investing in Capacity Case Coffee and snack shops are a popular and growing industry in the United States. It is forecasted that they will continue to grow at rates faster than general economic growth; in 2019, this market was valued at almost 60 billion dollars (Ibis World, 2019). Desserts and other luxury snack items are sometimes marketed as a branded “experience,” like high-end specialty snack items. To understand how a product can be sold as an experience, you might think of “Eloise at the Plaza,” the “American Girl Tea Shop” in New York City, an “Escape Room,” or Murder Mystery Nights.

Demand for luxury snack items sold as branded experiences increases with disposable income, or the income that consumers have left over after necessary costs, like shelter and transportation, are covered. Luxury snack items addressing food allergies and intolerances are also often sold in unique branded environments. Lactose-free ice cream is one such product. Competition in the market for luxury snack items is fierce, and franchisees selling these items frequently see the establishment of close competitors in nearby locations. The success of one establishment may lead to a mushrooming of similar establishments nearby.

Snack Box (a fictitious company) allows franchisees to market a set of branded items under conditions governing the nature of the establishment selling the products. Franchise agreements also dictate behavior of employees presenting items to the public within franchises. As a parent firm, Snack Box oversees multiple franchised locations and operators. Brands managed by Snack Box include frozen ices and custards, pretzels, waffles and crepes, moxtails, and related food items. To ensure uniformity across locations, Snack Box requires that all employees are similarly trained.

Note: A franchise allows a franchisee access to a firm's proprietary knowledge, processes, and trademarks or brands. The franchisee pays the franchisor or parent firm an initial start-up fee plus annual licensing fees. In addition, franchisees pay the parent firm a percentage of revenue outlined in each franchising agreement. Assume you are the owner and Chief Financial Officer of Snack Box. You plan to purchase an “off the shelf” content management system (CMS, or a software application or set of related programs used to create and manage digital content).

The evaluation of the CMS will meet some business requirements of Snack Box: • Improve employee training and satisfy client training needs: The CMS includes a library of existing human resources training, compliance, and professional development courses or modules. Training is interactive, social, and gamified to provide an incentive to complete the required training. Selected training systems allow authoring and modification of existing courses to meet the needs of various franchisees, products, locations, and compliance requirements. The CMS should have the ability to host multiple differently branded websites for the delivery of training information. You expect to increase the effectiveness of each location as a result. • Meet the unique financial needs of the parent firm.

The CMS needs to be used across a portfolio of franchise operations offering specialty food items, including custom brewery products and ciders, crepes, waffles and breakfast dinners. Snack Box has reviewed project-specific and firm-wide approaches to determining a weighted average cost of capital to utilize in valuing this project. It has determined that this project has lower firm-specific risk than other projects in which the firm is involved. You have developed the following capital budgeting criteria based on expected project cash flows, as follows: You have determined that the interest rate (risk) assigned to this project is 11% and the maximum allowable payback (PB) and discounted payback (DPB) periods for Snack Box are 3 and 3.5 years, respectively.

You have determined that the CMS will increase franchise fees and revenues with normal project cash flows shown as follows: Project Cash Flows Chart Time in Years Cash Flow $235,000 $65,800 $84,000 $141,000 $122,000 $81,200 Applying Net Present Value (NPV), Payback Period (PB), Discounted Payback (DPB), and Internal Rate of Return (IRR) as capital budgeting decision methods and discounting at a rate of 11%, you have evaluated NPV, PB, DPB and IRR. You have found that these decision rules call for acceptance or rejection of the project as follows: As part of your assignment, you will need to interpret the results for the various capital budgeting criteria that have been provided below. Specific questions will be provided in the project requirement section that follows.

Payback Period Chart Time in Years Cash Flow ($235,000) $65,800 $84,000 $141,000 $122,000 $81,200 Cumulative Cash Flow ($235,000) ($169,200) ($85,200) $55,800 $177,800 $259,000 PB: 2.6 years = 2 + ($85,200/$141,000) Net Present Value Time in Years Cash Flow ($235,000) $65,800 $84,000 $141,000 $122,000 $81,200 Discount (1+.+.+.+.+.+.11)5 Discounted Cash Flow ($235,000) $59,279 $68,176 $103,098 $80,365 $48,188 NPV $124,106.98

 Internal Rate of Return Time in Years Cash Flow ($235,000) $65,800 $84,000 $141,000 $122,000 $81,200 Discount (1+IRR)0 (1+IRR)1 (1+IRR)2 (1+IRR)3 (1+IRR)4 (1+IRR) = ($235,000) $51,091 $68,176 $103,098 $80,365 $48,188 IRR 28.79% Project Value using IRR $115,918.62 Project Requirements Your task is to prepare a document to make an effective decision regarding the investment in this software and related equipment. Your document should focus on the following specific explanations within sections A and B. Section A Explain the following elements of the decision to acquire this CMS. 1. Weighted Average Cost of Capital (WACC) Review Example 11.6 and pp. , 400, and 424 of our required text for more information on Project and Divisional Costs of Capital. Why is one component of Weighted Average Cost of Capital (WACC) calculated differently if project risk differs significantly from risk of existing projects (as in this case), than it is when it does not differ significantly from risk of existing projects? 2. Principles for Cash Flow Estimation • Review pp. of our required text for more information on Substitutes and Complements. For franchise locations, explain how each of the following two factors may affect Snack Box’s NPV estimates: o One Complement product or service sold within each franchise location, and o One Substitute establishment (meaning a competing establishment attracted by the success of the Snack Box franchise). • Review Example 2.6 on p. 49 of our required text, plus pp. of our required text) and Free Cash Flow. Because this CMS will represent an investment in fixed assets, explain whether this decision will change Operating Cash Flow of Snack Box.

Section B: Evaluate the Following Investment Criteria Review Chapter 13 of our required textbook before completing this task. Your responses should refer to the output for the various criteria that has been provided in the question. Evaluation of Alternatives • Managers generally understand that capital budgeting decision rules complement each other when used together. Apply two decision criteria listed here (NPV, PB, DPB, IRR) to determine whether Snack Box should accept or reject this project. • Review pp. , 346, 455 and of our required text. Explain the limitations of the criteria (NPV, PB, DPB, IRR) chosen to evaluate the acceptability of this CMS.