個案總覽

A large diversified company must develop a strategy for a division whose performance has deteriorated due to its aging product. Alternatives range from liquidation to a major investment in a new product. The formal capital budgeting system is compared with the informal process by which projects are identified and presented. This case is a consolidation of MRC, Inc. (A) and (B) by R.W. Moore.

Presents the estate plan worked out by the son to deal with an estate planning issue. The plan involves the use of deferred compensation employment contract with the family business, a key-man life insurance policy, and a split-dollar life insurance policy.

Describes in nonmathematical terms the nature of capital asset pricing model and possible use in estimating a company's cost of equity capital.

Describes the FCC hearings which were designed to determine Comsat's cost of equity. Comsat's risks are examined, and expert testimony is given. Objective of the case is to estimate Comsat's cost of equity.

Spreadsheet Supplement for case 276195

Spreadsheet supplement to case 276183.

Judy and John DeRight, looking to diversify their investment portfolios, have retained Angus Cartwright, Jr. to identify prospective real estate acquisitions. Mr. Cartwright has four potential properties that he feels merit an in-depth financial analysis. The case provides an opportunity to examine the various components of real estate return--cash flow, tax benefits, and futures--and measure the profitability of a proposed investment through the calculation of net present value, internal rate of return, and capitalization rate.

Financial vice president is expected to prepare a financing plan for Bio-Tech matching the most recent long-range plans of three operating groups. The latter, however, must be adjusted to take account of recommendations to be made on plant investment of one product group and possible sale of a major division.

Spreadsheet Supplement for case 275124

A large integrated oil company is debating whether to switch from a single hurdle rate to multiple hurdle rates for project analysis purposes. Raises questions on: 1) determination of the cost of equity; 2) the usefulness of multiple hurdle rates to adjust for project risk; 3) differences between a project's risk and its impact on overall corporate risk; and 4) the limitations of project analysis and capital budget systems.

Faced with large external financing needs and a low stock price, Con Ed management must decide whether to pay a cash dividend in April 1974. Based on Consolidated Edison by G.C. Lodge.

The president of a medium-sized electronics company is evaluating the financial forecasts and proposed financing program submitted by the chief financial officer. The forecasts are prepared in constant dollars, on which basis the proposed financing plan seems reasonable. However, when inflation is incorporated into the forecasts, the financing need far exceeds available sources of funds, and adjustment on the operating side is necessary. The danger of relying on a single set of forecasts based on the most likely outcome is also demonstrated.

MRC, Inc. faces a decision regarding entry into the production of polyester fiber in competition with much larger firms. An updated version of an earlier case by J.H. McArthur.

The executive president of a major industrial company must decide 1) whether to acquire a small hand tool company and, if so, 2) the value and form that the acquisition package should take.

MRC must place a value on an acquisition prospect and also decide whether a deal makes sense from strategic and organizational perspectives. An updated version of and earlier case by W.E. Fruhan, Jr. and J.H. McArthur.

Spreadsheet Supplement for case 274118

Spreadsheet Supplement for case 274092.

Shipping company must choose among several mutually exclusive investment projects.

Examines how the attractiveness of an investment project can be enhanced by making financing and operating decisions which either manage investment returns or reduce project risks.

Four individuals purchase a small company, making heavy use of debt financing.