The firm needed better financial planning however

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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.

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