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Unformatted text preview: nt on a capital spending spree to add capacity.
The firm needed better financial
planning, however: Managers did
not prepare project cost reports,
the company bought top-of-theline equipment, top management
approved projects in spite of unattractive projected returns. By the
early 1990s, Coors’ financial performance was suffering.
This changed in 1995 when
seasoned financial executive Tim
Wolf joined Coors as CFO. Wolf
quickly identified the need for
greater financial discipline in planning and capital budgeting. He
implemented more stringent
guidelines for capital spending
and required business unit managers to develop a sound business
case to justify proposed capital
expenditures. He also created a
partnership between finance and
operating departments, which Hint Sunk costs and
opportunity costs are
concepts you must fully
understand. Funds already
spent are irrelevant to
future decisions, but funds
given to one project that
eliminates the investment
returns of another project
are considered a relevant
cost. Capital Budgeting Cash Flows...
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This document was uploaded on 01/19/2014.
- Fall '13