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FIN Assignment - You are the CFO of Ford Motor Company




Question;Research Paper Criteria;Below is the criteria;and information for your Research Paper.;You are the CFO of Ford;Motor Company (the company) considering taking on a project that requires $10;million in preliminary funding (in other words, the project will acquire $10;million in costs before it becomes profitable.;This project would be;designed to develop a new fuel saving devise (not a new engine) that could be;added to all models of passenger vehicles sold by Ford Motor Company. The new;fuel savings devise would add $2500.00 to each vehicle sold by Ford Motor;Company (passenger vehicles). It is assumed that 90% of the passenger;vehicles sold would be sold with this devise. The expected fuel savings;(in dollars) for each passenger vehicle owner (based on an average of;$5.00/gal) would be 15% per year.;Research the Internet to;find out information on Ford Motor Company?s balance sheet, income statement;statement of retained earnings and statement of cash flows for the most current;year reported.;There are several;specific questions that must be addressed in this research paper before a;decision on moving ahead with this project is made. Based on your;research of the most recent financial statements for this company and the;financial markets address the following issues;1.;Determine the current;rate of return on risk-free assets.;2.;Determine beta for Ford;Motor Company from an internet financial site such as Yahoo-Financial.(Do they;need to estimate beta or can they just get it from Yahoo-Finance).;3.;Determine the required;return on market;4.;Determine an appropriate;interest rate for loans of this amount of capital for a well-established;company like Ford Motor Company.;5.;Determine the internal;rate of return for Ford Motor Company using the financial tools at the website;below:;6.;After you calculate or;identify the items listed above you will need to address the following issues;1.;Should the company;undertake this project? Justify your opinion.;2.;In principle;undertaking a project involves making financial decisions that could make or;break the project.;1.;How do you plan to;finance the project?;2.;There are plenty of;financing options, including: common stock, preferred stock, debt (many debt;options), bank loans, and internal cash. What will be your recommendations on;this issue?;3.;What is the cost of each;of these options?;4.;Is there one financing;mix that is better than the rest? Explain your rationale. Support your work;with research and calculations.;Submit your paper as a;Microsoft Word document, using Time New Roman 12 pt font, double-space.;Provide an Excel sheet with numerical data and calculations wherever necessary.;Financial statements and Excel spreadsheet calculation should be a part of the;Appendix for your research paper and not part of the paper itself.;Appropriate references should be included in your research paper to the;Appendix where necessary.;The expected length for;this research paper (not including the Appendix or references) should be;between 8 and 12 pages.;Make sure you follow;current APA style. Your paper should also include a Reference section for all;of the sources you have cited.;Grading Criteria;Maximum Points;Recommended, with reasons;whether the company should undertake the project;50;Explained, with;reasons, how to finance the project;50;Supported analysis and;conclusions with relevant evidence and numerical data;70;Followed APA;guidelines for writing style, grammar, spelling, and citation of sources;30;Total;200


Paper#48122 | Written in 18-Jul-2015

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