Final-gordon - Computron is forcasting a good year for 2011...

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Caroline Herring: “Computron Industries: Risk Analysis” Caroline Herring BUS 515- Financial Management Dr. Gordon Smith September 25, 2011 Computron Industries: Risk Analysis Computron Industries is a manufacturer of electronic calculators. In this paper, I will attempt to determine the financial health of Computron Industries by performing a risk analysis. I will evaluate the impact on 2011 estimated net income from changes in the operating performance of the company. The first analysis I will perform will be a sensitivity analysis on sales. The second analysis I will perform will be a scenario analysis on sales. If sales increase, I believe that Computron should invest more in their investments. If sales decrease, I think they should take a more conservative stance in their investing. Sales highly correlates with Computron's NPV, and therefore they can be more risky in years where they are selling more.
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Unformatted text preview: Computron is forcasting a good year for 2011 so I believe they should invest more to increase stockholder's equity. Data for Sensitivity Graph Deviation from Base NPV With Variables at Different Deviations From Base Equipment Price Units VC/unit Non-VC WACC 30.00% 8.4 10.00% 10.8 0.00% 12 12 12 12 12 12-10.00% 10.8-30.00% 8.4 Selling Quantity Price Revenue 5834400 Cost 4980000 EBIT 17440 Caroline Herring: Computron Industries: Risk Analysis Appendix WACC= .68 (40%) (1-0.4) +.32 (60%) = 35.52% Current ratio: 2680112/1039800 = 2.58 Quick ratio= .93 (Gordon- I've got no idea what I'm doing in this chapter. Sorry, I know this paper is terrible. I gave you as much as I could. Thanks! Other than this, the class has been great!) -Caroline...
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Final-gordon - Computron is forcasting a good year for 2011...

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