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UVA-F-1356 Euroland Foods S. A. ACCESSING THE DOCUMENT(S) You should follow these types of instructions to successfully gain access to your document(s): 1 .

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Document IDENTIFICATION:???????????? 2012 -1-23 ( Version 2 . six. 0 B uild The protectedpdf technology is Copyright 2006 Vitrium Devices Inc. Almost all Rights Set aside. Patents Pending. UVA-F-1356 Type 1 . one particular EUROLAND FOOD S. A. In early January 2001, the senior management committee of Euroland Foods was to meet to draw up the organization? s capital budget for 2012. Up for account were eleven major tasks that totaled more than (euro) EUR316 mil. Unfortunately, the board of directors experienced imposed a spending limit on capital projects of only EUR120 million, having said that, investment in which rate would represent a significant increase in the firm? current asset bottom of EUR965 million. Therefore, the challenge intended for the older managers of Euroland Foods was to designate funds among a range of compelling tasks: new-product intro, acquisition, industry expansion, productivity improvements, preventive maintenance, safety, and pollution control. The corporation Euroland Foods, headquartered in Brussels, Athens, was a international producer of high-quality goodies, yogurt, bottled water, and fresh fruit juices. Its products were sold during Scandinavia, The united kingdom, Belgium, the Netherlands, Luxembourg, western Germany, and northern Italy. (See Display 1 for the map in the company? promoting region. ) The company was founded in 1924 by Theo Verdin, a Belgian character, as a great offshoot of his milk business. Through his willing attention to product development and clever marketing, the organization grew steadily over the years. The company went community in 1979, and, by 93, was outlined for trading on the Greater london, Frankfurt, and Brussels exchanges. In 2000, Euroland Foods had sales of almost EUR1. 6 billion dollars. Ice cream made up 60% in the company? t revenue, fat free yogurt, which was released in 1982, added about twenty percent. The remaining 20% of revenue was divided equally between bottled water and fruit juices.

Euroland Foods? s flagship name brand was? Rolly,? which was displayed by a body fat dancing within farmer? t clothing. Goodies, the company? t leading product, had a devoted base of shoppers who wanted its high-butterfat content, large chunks of chocolate, fruits, nuts, and wide range of original flavors. The case was prepared by Casey Opitz and Robert F. Bruner, Dean and Charles C. Abbott Teacher of Organization Administration, and draws certain elements via an antecedent case by simply them. All names will be fictitious. The financial support of the Batten Institute is definitely gratefully recognized.

It was drafted as a basis for class discussion rather than to illustrate effective or inadequate handling of the administrative scenario. Copyright 2001 by the University or college of Va Darden University Foundation, Charlottesville, VA. Almost all rights reserved. To buy copies, give an email to [email, protected] com. No component to this syndication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in just about any form or perhaps by any means? electronic digital, mechanical, photocopying, recording, or otherwise? without the agreement of the Darden School Foundation.????????????????????????????????????????????????????????????????????? -2- UVA-F-1356 Euroland Foods sales was static seeing that 1998 (see Exhibit 2), which management attributed to low population growth in north Europe and market vividness in some areas. Outside experts, however , faulted recent failures in new-product introductions. The majority of members of management desired to expand the business? s market presence and introduce even more new products to increase sales. These managers wished that increased market existence and sales would improve the company? the true market value. The company? h stock was currently in 14 moments earnings, slightly below book value. This price/earnings ratio was below the trading multiples of comparable companies, and this gave tiny value to the company? h brands. Useful resource Allocation The administrative centre budget by Euroland Foods was well prepared annually by a committee of senior managers, who in that case presented it for endorsement to the table of administrators. The committee consisted of five managing directors, the director directeur-general (PDG), and the finance director. Commonly, the PDG solicited purchase proposals through the managing owners.

The proposals included a quick project information, a financial analysis, and an analysis of strategic or various other qualitative considerations. As a couple of policy, expense proposals in Euroland Foods were be subject to two financial tests: repayment and inside rate of return (IRR).

You browse ‘Euroland Food S. a’ in category ‘Essay examples’ The assessments, or obstacles, had been proven in 1999 by the management committee and diverse according to the type of project since shown in Table 1 ) Table 1 ) Project difficulties. Minimum Acceptable IRR Optimum Acceptable Repayment Years 1 ) New product or new market segments 12% six years 2 . Merchandise or industry extension 10% 5 years 3.

Effectiveness improvements 8% 4 years 4. Protection or environmental No test No test Type of Task In January 2001, the estimated weighted-average cost of capital (WACC) to get Euroland Foods was twelve. 6%. In describing the capital-budgeting procedure, the financing director, Trudi Lauf, said: We utilize sliding scale of IRR tests as a method of recognizing differences in risk among the various kinds of jobs. Where the company takes even more risk, we ought to earn more return. The payback test out signals we are not ready to wait for extended to achieve that returning.????????????????????????????????????????????????????????????????????? -3- UVA-F-1356 Ownership as well as the Sentiment of Creditors and Investors Euroland Foods? s 12-member panel of owners included 3 members from the Verdin friends and family, four associates of management, and five outside owners who were dominant managers or perhaps public characters in upper Europe. People of the Verdin family combined owned 20% of Euroland Foods? h shares excellent, and business executives combined owned 10% of the stocks and shares. Venus Advantage Management, a mutual-fund management company in London, held 12%.

Banque du Bruges ou des Will pay Bas held 9% together one representative on the board of directors. The remaining 49% of the company? s stocks were widely held. The firm? s i9000 shares traded in Brussels and Holland, Germany. In a debt-to-equity ratio of 125%, Euroland Foods was leveraged far more highly than its peers in the European consumer-foods sector. Management experienced relied on debt auto financing significantly within the previous couple of years to maintain the company? s capital spending and dividends during a period of selling price wars started by Euroland. Now, together with the price battles finished, Euroland? bankers (led by Rémunération du Bruges) strongly told an hostile program of debt lowering. In any event, these were not able to finance improves in influence beyond the latest level. The president of Banque i Bruges got remarked in a recent panel meeting: Fixing some durability to the right hand side with the balance sheet ought to now be an initial priority. Any expansion of assets needs to be financed in the cash flow after debt amortization until the debts ratio earnings to a more prudent level. If you will find crucial assets that can not be funded this way, then we should cut the dividend!

At a price-to-earnings ratio of 14 moments, shares of Euroland Foods common share were charged below the average multiples of peer companies and the typical multiples of most companies within the exchanges exactly where Euroland Food was bought and sold. This was due to the latest price battles, which experienced suppressed the company? s earnings, and to the well-known the latest failure of the company to seize significant market share with a new product line of flavored standard water. Since January 2000, every one of the major securities houses have been issuing? sell? recommendations to investors in Euroland Foods shares.

Morgenstern Asset Supervision had silently accumulated stocks and shares during this period, yet , in the requirement of a transformation in the organization? s overall performance. At the most recent board meeting, the senior managing director of Venus gave a presentation, through which he explained: Cutting the dividend is definitely unthinkable, as it would sign a lack of hope in your own future. Selling new shares of stock with this depressed cost level is usually unthinkable, since it would can charge unacceptable dilution on your current shareholders. Your equity traders expect a noticable difference in overall performance. If that improvement is definitely not impending, or a whole lot worse, if traders? opes will be dashed, the shares may fall into the hands of raiders like Carlo para Benedetti or maybe the Flick brothers. 1 you De Benedetti of Miami and the Flick brothers of Munich were leaders of prominent hostile-takeover attempts recently.????????????????????????????????????????????????????????????????????? -4- UVA-F-1356 At the conclusion of the very recent appointment of the owners, the board voted all to limit capital spending to EUR120 million in 2001. Associates of the Elderly Management Committee

Seven older managers of Euroland Foods would make the capital finances. For consideration, each job had to be paid by one of many managers present. Usually your decision process included a period of discussion followed by a vote about two to four alternative capital costs. The various business owners were well-known to each other: Wilhelmina Verdin (Belgian), PDG, era 57. Granddaughter of the owner and someone on the plank of directors for the Verdin family members? s pursuits. Worked for the company her entire job, with significant experience in brand management. Elected? European Marketer in the Year? d 1982 pertaining to successfully introducing low-fat yogurt and your favorite ice cream, the 1st major roll-out of this kind of product. Wanting to position the organization for long-term growth nevertheless cautious inside the wake of recent difficulties. Trudi Lauf (Swiss), finance director, age group 51. Appointed from Nestle in 95 to modernize financial regulates and systems. Had been a vocal advocatte for reducing leverage on the “balance sheet”. Also, been vocal the problems and let-downs of stockholders. Heinz Klink (German), controlling director to get Distribution, grow older 49. Oversaw the vehicles, warehousing, and order-fulfillment activities in the organization.

Spoilage, transportation costs, stock-outs, and control systems were perennial challenges. Maarten Leyden (Dutch), taking care of director intended for Production and buying, age 59. Managed creation operations on the company? h 14 plants. Engineer by simply training. Challenging negotiator, particularly with unions and suppliers. A fanatic about production-cost control. Had voiced doubts about the truthfulness of credit card companies? and investors? commitment to the firm. Ámbito Ponti (Italian), managing movie director of Revenue, age forty five. Oversaw the field sales team of two hundred and fifty representatives and planned within geographical revenue coverage.

One of the most vocal advocatte for rapid growth on the senior-management committee. Observed several chances for approaches to improve physical positioning. Hired from Unilever in 93 to revitalize the revenue organization, which in turn he effectively accomplished. Fabienne Morin (French), managing representative for Advertising, age forty one. Responsible for advertising research, new-product development, advertising, and in basic, brand management. The primary advocate of the recent price battle, which, although financially challenging, realized sound gains in market share. Identified a? window of opportunity? or item and market expansion and tended to compliment growth-oriented tasks. Nigel Humbolt (British), controlling director for Strategic Planning, age forty seven. Hired 2 years previously by a well-known asking firm to create a strategic planning staff????????????????????????????????????????????????????????????????????? -5- UVA-F-1356 to get Euroland Foods. Known for asking difficult and challenging queries about Euroland? s core business, its maturity, and profitability. Backed initiatives aimed at growth and market share.

Acquired presented one of the most aggressive proposals in 2000, non-e that were recognized. Becoming disappointed with what this individual perceived to become his deficiency of influence in the organization. The Expenditure Plans The forthcoming meeting would entertain this proposals in Table a couple of: Table installment payments on your Project plans. Project Expenses (euro millions) Sponsoring Administrator 1 . Replacement unit and enlargement of the vehicle fleet 33 Klink, distribution 2 . A fresh plant 45 Leyden, creation 3. Enlargement of a grow 15 Leyden, production four. Development and roll-out of snack foods twenty-seven Morin, advertising 5. Plant automation and conveyor devices 21 Leyden, production. Effluent-water treatment in four crops 6 Leyden, production several. Market expansion southward 30 Ponti, product sales 8. Marketplace expansion eastward 30 Ponti, sales 9. Development and introduction of recent artificially sweetened yogurt and ice cream 28 Morin, marketing 10. Networked, computer-based inventorycontrol system intended for warehouses and field staff 22. your five Klink, distribution 11. Purchase of a leading schnapps brand and associated services 60 Humbolt, strategic planning 1 . Replacement unit and expansion of the vehicle fleet: Heinz Klink proposed to purchase 100 new refrigerated tractor-trailer pickup trucks, 50 every in 2001 and 2002.

By doing so, the company could sell 60 old, fully declined trucks within the two years for the total of EUR4. 05 million. The purchase will expand the fleet by simply 40 vehicles within 2 yrs. Each of the fresh trailers would be larger than the trailers and afforded a 15% increase in cubic meters of goods hauled on each trip. The new tractors would become more fuel- and maintenance-efficient. The increase inside the number of vans would grant more flexible scheduling and more successful routing and servicing with the fleet than at present and would cut delivery instances and, therefore , possibly inventories. It????????????????????????????????????????????????????????????????????? -6- UVA-F-1356 will also enable more recurrent deliveries for the company? s i9000 major markets, which might reduce the decrease of sales caused by stock-outs. Finally, expanding the fleet might support physical expansion in the long term. Because shown in Exhibit a few, the total net investment in trucks of EUR30 , 000, 000 and the increase in working capital to compliment added protection, fuel, salaries, and inventories of EUR3 million was expected to produce total cost savings and added sales potential of EUR11. million above the next seven years. The resulting IRR was estimated to be six. 8%, partially below the minimal 8% required return in efficiency projects. Some of the managers wondered if this project would be even more properly categorized as? productivity? than? expansion.? 2 . A fresh plant: Maarten Leyden observed that Euroland Foods yogurt and ice-cream sales inside the southeastern location of the organization? s industry were going to exceed the capability of the Melun, France, manufacturing and packaging flower. At present, a number of the demand had been met simply by shipments in the company? s i9000 newest, most effective facility, found in Strasbourg, Italy.

Shipping costs over that distance were high, however , and some revenue were certainly being shed when the advertising effort could hardly be maintained delivery. Leyden proposed a new developing and presentation plant always be built in Dijon, France, merely at the current southern edge of the Euroland Foods promoting region, to adopt the burden off of the Melun and Strasbourg crops. The cost of that plant will be EUR37. five million and would include EUR7. five million pertaining to working capital. The EUR21 , 000, 000 worth of kit would be amortized over seven years, as well as the plant over ten years.

Via an increase in revenue and depreciation and the decrease in delivery costs, the plant was expected to deliver after-tax funds flows totaling EUR35. 6 million and an IRR of 11. 3% in the next 10 years. This job would be labeled as a industry extension. three or more. Expansion of a plant: Beyond the need for higher production capacity in Euroland Foods? t southeastern area, its Nuremberg, Germany, herb had come to full capability. This situation made the booking of routine equipment routine service difficult, which will, in turn, made production booking and deadline problems.

This plant was one of two extremely automated establishments that produced the Euroland Foods? s entire line of bottled water, mineral water, and fresh fruit juices. The Nuremberg plant supplied central and western European countries. (The various other plant, around Copenhagen, Denmark, supplied the Euroland Food northern European markets. ) The Nuremberg plant capacity could be widened by twenty percent for EUR15 million. The device (EUR10. a few million) would be depreciated over seven years, and the grow over ten years. The improved capacity was expected to lead to additional development of up to EUR2. 5 mil a year, yielding an IRR of 10. 2%. This project will be classified being a market file format. 4. Expansion and roll-out of snack foods: Fabienne Morin suggested which the company use the excess potential at its Antwerp spice- and nut-processing facility to produce a type of dried fruits to be test-marketed in Belgium, Britain, as well as the Netherlands. The lady noted the effectiveness of the Rolly brand in those countries and the success of different food and beverage companies that had expanded in snack food creation. She argued that the Euroland Foods? standing for wholesome, quality products would be improved by a distinctive line of dried fruits and, additional, that identity????????????????????????????????????????????????????????????????????? -7- UVA-F-1356 association with the new product would probably even lead to increased sales from the company? h other products among health-conscious consumers. Gear and working-capital investments were expected to total EUR22. a few million and EUR4. your five million, correspondingly, for this job.

The equipment would be depreciated above seven years. Assuming test market was successful, funds flows from the project would be able to support further more plant growth in other tactical locations. The IRR was expected to end up being 13. 4%, slightly above the required returning of 12% for new-product projects. a few. Plant software and conveyer systems: Maarten Leyden as well requested EUR21 million to improve automation with the production lines at half a dozen of the business? s old plants. The effect would be improved throughput rate and decreased accidents, some spillage, and creation tieups.

The last two vegetation the company had built included conveyer systems that eliminated the need for virtually any heavy working out with by workers. The devices reduced the chance of injury by personnel, at the 6 older plant life, the company acquired sustained an average of 223 missed-worker days each year per herb in the last couple of years because of muscle injuries sustained in heavy lifting. In an average hourly total settlement rate of EUR14. 00 an hour, much more than EUR150, 000 a year were thus misplaced, and the possibility always existed of more severe injuries and lawsuits. General, cost savings and depreciation totaling EUR4. 3 million a year for the project had been expected to deliver an IRR of almost eight. 7%. This kind of project can be classed in the efficiency category. 6. Effluent-water treatment in four vegetation: Euroland Food preprocessed a variety of fresh fruits in its Melun and Strasbourg crops. One of the first phases of control involved washing the fruit to get rid of dirt and pesticides. The dirty normal water was merely sent to waste and in to the Seine or perhaps Rhine Streams. Recent Euro Community directives called for any kind of wastewater made up of even moderate traces of poisonous chemicals to be treated at the sources, and offered companies several years to comply.

Because an eco oriented job, this pitch fell beyond the normal monetary tests of project elegance. Leyden mentioned, however , that the water-treatment gear could be bought today intended for EUR6 mil, he believed that the same equipment could cost EUR15 million in four years when immediate conversion started to be mandatory. In the meanwhile, the company could run the risks that Western Community government bodies would shorten the complying time or perhaps that the organization? s polluting of the environment record will become community and damage the image from the company inside the eyes of the consumer.

This kind of project will be classed inside the environmental category. 7 and 8. Industry expansions southward and eastward: Marco Ponti recommended which the company grow its market southward to include southern England, Switzerland, Italy, and The country of spain, and/or eastward to include asian Germany, Biskupiec, poland, Czechoslovakia, and Austria. Ponti believed the time was right to expand sales of ice cream, and possibly yogurt, geographically. In theory, the company could support expansions in both directions simultaneously, nevertheless practically, Ponti doubted the fact that sales and distribution businesses could sustain both expansions at once.

Every alternative geographical expansion experienced its benefits and risks. If the organization expanded eastward, it could reach a large population with a great appetite intended for frozen dairy food, but it might also encounter more competition from community and local ice cream????????????????????????????????????????????????????????????????????? -8- UVA-F-1356 suppliers. Moreover, consumers in east Germany, Poland, and Czechoslovakia did not have purchasing power that consumers to the south did.

The eastward enlargement would have to end up being supplied via plants in Nuremberg, Strasbourg, and Freie und hansestadt hamburg. Looking southward, the furniture were switched: more purchasing power and fewer competition yet also a smaller sized consumer urge for food for ice cream and fat free yogurt. A southward expansion could require building consumer demand for premium-quality fat free yogurt and ice cream. If not of the plant proposals (proposals 2 and 3) was accepted, then the southward expansion would need to become supplied from plants in Melun, Strasbourg, and Rouen. The initial expense of either pitch was EUR30 million of working capital.

The majority of this task? s costs was expected to involve the financing of distributorships, yet over the 10-year forecast period, the marketers would gradually take over the responsibility of carrying receivables and inventory. Both equally expansion plans assumed the rental of suitable storage place and syndication facilities. The after-tax money flows had been expected to total EUR56. 3 million intended for southward enlargement and EUR48. 8 million for eastward expansion. Ambito Ponti pointed out that southward development meant an increased possible IRR but that moving eastward was a much less risky proposition.

The projected IRRs had been 21. 4% and 18. 8% for southern and eastern expansion, respectively. These kinds of projects can be classed inside the marketextension category. 9. Expansion and intro of new unnaturally sweetened yogurt and ice cream: Fabienne Morin noted that recent innovations in the synthesis of unnatural sweeteners were showing promise of significant cost savings to food and beverage producers as well as revitalizing growing with regard to low-calorie products. The challenge was going to create the proper flavor to complement or boost the other elements.

For goodies manufacturers, the difficulty lay in creating a harmony that would make same flavour as was obtained when you use natural sweeteners, artificial sweeteners might, naturally , create a remarkable taste. Additionally , EUR27 , 000, 000 would be needed to commercialize a yogurt line that experienced received guaranteeing results in laboratory tests. This kind of cost included acquiring specialized production establishments, working capital, plus the cost of the first product launch. The overall IRR was estimated to be 20. 5%.

Morin stressed the proposal, although highly doubtful in terms of genuine results, could be viewed as a method of guarding present market share, because additional high-quality icecream producers executing the same analysis might bring in these products, in case the Rolly brand did not bring an unnaturally sweetened line and its competition did, the manufacturer might go through. Morin as well noted the parallels between innovating with artificial sweeteners and the business? s earlier success in introducing less fat products. This kind of project ould be classed in the new-product category of investments. 10. Network, computer-based inventory-control system for warehouses and field staff. Heinz Klink had constrained unsuccessfully for three years for any state-of-the-art????????????????????????????????????????????????????????????????????? -9- UVA-F-1356 computer-based inventory-control system that would link field product sales representatives, distributors, drivers, facilities, and possibly possibly retailers.

The benefits of such a method would be shorter delays in ordering and order processing, better power over inventory, reduction of spoilage, and faster recognition of changes in require at the consumer level. Klink was hesitant to quantify these rewards, because they will could range between humble and quite large amounts. This year, for the first time, this individual presented a cash-flow outlook, however , that reflected an initial outlay of EUR18 million for the system, followed by EUR4. 5 million in the next 12 months for supplementary equipment. The inflows mirrored depreciation tax shields, tax credits, cost reductions in warehousing, and reduced inventory.

He prediction these rewards to previous for just three years. Even so, the project? s IRR was believed to be sixteen. 2%. This kind of project would be classed in the efficiency group of proposals. 14. Acquisition of a leading schnapps2 company and linked facilities. Nigel Humbolt experienced advocated making diversifying acquisitions in an effort to push beyond the corporation? s older core business but doing this in a way that exploited the company? h skills in brand managing. He had explored six possible related industrial sectors in the standard field of consumer grouped together goods and determined that cordials and liqueurs provided unusual chances for eal growth and, at the same time, marketplace protection through branding. He had identified 4 small manufacturers of well-established brands of liqueurs as acquisition candidates. Pursuing exploratory speaks with every, he had identified that only one particular company could be purchased soon, namely, the primary private European manufacturer of schnapps, situated in Munich. The proposal was expensive: EUR25 million to buy the company and EUR30 , 000, 000 to refurbish the company? s facilities totally while at the same time expanding circulation to fresh geographical markets.

The predicted returns had been high: after-tax cash runs were forecasted to be EUR198. 5 , 000, 000, yielding a great IRR of 27. 5%. This project would be classed in the new-product category of plans. Conclusion Each member of the administration committee was expected to come to the meeting prepared to present and defend a pitch for the allocation of Euroland Foods? s capital budget of EUR120 million. Exhibit several summarizes the various projects with regards to their free of charge cash runs and the investment-performance criteria. two Any of several strong dried liquors, like a strong Dutch gin.

Description borrowed by American Heritage Dictionary of the English Language, 4th impotence.????????????????????????????????????????????????????????????????????? -10- UVA-F-1356 Exhibit one particular EUROLAND FOODS S. A. Nations in which Euroland Foods Competed Notice: The shaded area on this map shows the principal distribution region of Euroland? t products. Significant facilities will be indicated by the following figures: 1 a couple of 3 4 5 six 7 8 9 10 Headquarters, Brussels, Belgium Grow, Antwerp, Belgium Plant, Strasbourg, France Flower, Nuremberg, Germany Plant, Hamburg, Germany

Plant, Copenhagen, Denmark Plant, Svald, Sweden Herb, Nelly-on-Mersey, Britain Plant, Caen, France Flower, Melun, Italy????????????????????????????????????????????????????????????????????? -11- UVA-F-1356 Exhibit two EUROLAND FOOD S. A. Summary of Financial Results (all values in euro thousands, except per-share amounts) Money Year Closing December 1998 1999 Gross sales 1, 614 1, 608 1, 611 Net income 77 74 56 1 . 13 1 . 08 0. 81 Dividends 31 30 30 Total assets 716 870 984 Shareholders? equity (book value) 559 640 697 1, 271 1, 258 784 Revenue per talk about

Shareholders? equity (market value) 2000????????????????????????????????????????????????????????????????????? -12- UVA-F-1356 Show 3 EUROLAND FOODS T. A. Free of charge Cash Runs and Analysis of Recommended Projects1 (all values in euro millions) Project 1 2 Increase Truck Fleet (note 3) Investment Property Seed money 3 Fresh Plant (Dijon, France) some 5 six Expanded Software Plant and (Nuremberg, Conveyer Germany) Snack Foods S ystems 7 almost 8 9 15 Southward Enlargement (note 5) Eastward At the xpansion (note 5) Unnatural S weetener InventoryControl H ystem Strategic

A cquisition (note 6) 30. 00 3. 00 37. 40 7. 60 15. 00 0. 00 -17. 15 -11. 85 4. 60 5. twenty-five 6. 00 6. seventy five 7. 50 10. 50 11. 55 -45. 00 3. 00 7. 60 8. 25 9. 00 9. 32 9. 75 10. 13 7. 60 7. 88 8. 25 35. 63 -15. 00 1 . 88 2 . 25 2 . 63 3. 00 3. 32 3. seventy five 2 . twenty-five 2 . twenty-five 2 . 25 2 . twenty-five 10. 88 6 5 6 your five 6 your five 7 six 6 some 5 6th IRR Lowest Accepted ROR Spread six. 8% 8. 0% -0. 2% 11. 3% 10. 0% 1 . 3% 11. 2% 12. 0% 1 . 2% 13. 4% doze. 0% 1 ) 4% 8. 7% almost eight. 0% zero. 7% NPV at Corp. WACC (10. 6%) -2. 88 1 . 49 zero. 41 3. 74 NPV at Minimal ROR -0. 19 2 . 81 zero. 82 Equal Annuity (note 2) -0. 04 zero. 46 zero. 13 Con ear 0 1 a couple of 3 4 5 six 7 almost 8 9 15 Undiscounted Total Payback (years) Maximum Repayment Accepted installment payments on your 50 twenty one. 00 0. 00 zero. 00 four. 50 zero. 00 30. 00 40. 00 EXPECTED FREE MONEY FLOWS (note 4) -9. 00 -21. 00 -30. 00 -30. 00 -9. 00 4. 13 your five. 25 four. 50 -9. 00 4. 13 6. 00 your five. 25 5. 50 4. 13 six. 75 6th. 00 four. 50 some. 13 7. 50 six. 75 6. 00 four. 13 almost eight. 25 six. 50 6. 75 some. 13 on the lookout for. 00 8. 25 7. 50 4. 13 on the lookout for. 75 9. 00 almost 8. 25 twelve. 50 being unfaithful. 75 9. 00 14. 25 12. 50 being unfaithful. 75 doze. 00 14. 25 up to 29. 25 7. 88 56. 25 forty eight. 75 twenty two. 50 5. 50 twenty-two. 50 zero. 00 45. 00 15. 00 -27. 00 some. 50 6. 00 six. 75 several. 50 six. 50 several. 50 several. 50 six. 50 six. 50 six. 50 40. 75 -18. 00 eight. 25 8. 25 six. 50 six. 00 -25. 00 -30. 00 7. 50 13. 50 of sixteen. 50 nineteen. 50 twenty-two. 50 25. 50 twenty-eight. 50 31. 50 88. 50 198. 50 a few 6 a few 6 several 4 five 6 twenty-one. 4% doze. 0% on the lookout for. 4% almost eight. 8% doze. 0% 6th. 8% 20. 5% doze. 0% almost eight. 5% of sixteen. 2% 8. 0% 8. 2% twenty-seven. 5% doze. 0% 15. 5% -1. 31 18. 99 13. 49 13. 43 1 . 75 69. 45 1 ) 79 zero. 48 18. 85 12. 62 twelve. 97 2 . 67 59. 65 zero. 32 zero. 09 installment payments on your 63 1 ) 88 1 . 94 1 . 03 12. 56 you The liquid treatment program can be not included from this exhibit. The same annuity of a project is the fact level total annual payment that yields a net present value equal to the NPV at the minimum essential rate of return for the project. Pension corrects for differences in length among various projects. In ranking jobs on the basis of comparative annuity, greater annuities make more trader wealth than smaller annuities. This reflects EUR16. a few million spent both primarily and at the conclusion of 12 months one. some Free cashflow = Incremental profit or perhaps cost savings after taxes & Depreciation Purchase in fixed assets and working capital. a few Franchisees will gradually take control the burden of carrying receivables and products on hand. 6 EUR25 million can be spent in the first season, EUR30 million in the second, and EUR5 million in the third. a couple of?????????????????????????????????????????????????????????????????????

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