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FIN 571 Week 6 Guillermo Furniture Store Recommendation

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FIN 571 Week 6 Guillermo Furniture Store Recommendation;Guillermo Furniture Stores Recommendation;FIN 571;Aug 16, 201 3;Introduction;One such factor in the Guillermo Furniture Store (GFS) decision-making scenario is the desire of the owner of GFS, Navallez Guillermo to spend more time ????.;No Change Alternative;Clearly, the mid-grade furniture product manufactured by GFS is facing competitive ??? not a sufficient element of differentiation to overcome competitor pricing of mid-grade furniture products in a pure competition market structure.;?.;Technology Purchase Alternative;GFS could purchase the expensive, highly technological, computerized manufacturing equipment to manufacture the mid-grade furniture line. Enough ???.;???. a line of credit loan or note to acquire the advanced computerized technology necessary to produce the mid-grade furniture line in a cost-effective manner.;??? profit is $159. Gross profit is $603,882. Yearly net income of the mid-grade furniture line is $54,414.50. Overhead expense increases, utility costs increase, insurance increases, property taxes increase, depreciation expense increases, and income taxes ???. manufacturing equipment. GFS expects an increase in gross profit from the mid-grade furniture line of $174,708.00 to $603,882.00 that equals $429,174.00.;Net Present Value;The viability ???..,667.00 will return to GFS the required return at the end of the project. The Net Present Value is $265,145.37 and the Present Value of Expected Cash Flows is $681,812.37. The yearly cash inflow was $107,412.00 equal to one-half of the expected increase in after tax net income using the technologically advanced manufacturing equipment. The.;Internal Rate of Return;The Internal Rate of Return (IRR) rule is that if the cash flows exceed the cost of capital, the investment with the highest IRR is the best ?..;Purchase Technologically Advanced Equipment (US Dollars);Revenues 3,798 units x $459 price per unit = $1,743,282;Costs;Overhead $695,979;Sunk Cost $174,708;Taxes $ 82,137;Total Costs = $952,824;IRR Ratio = Revenue/Costs = 1,743,282/952,824 = 1.83;Outsourcing and Distributorship Alternative;Recommendation and Justification.;Conclusion;A determining factor in the Guillermo Furniture Store (GFS) decision-making scenario is the desire of the owner of GFS, Navallez Guillermo to spend more ??;References;Alaska USA.(2012). Business Loan Rates. Retrieved from http://www.alaskausa.org/current/rates/businessLoanRates.asp;Clark, W. (2012).The Disadvantages of Merging Companies. Retrieved from http://www.ehow.com/info_8199594_disadvantages-merging.html;Emery, D. R., Finnerty, J. D., & Stowe, J. D. (2007). Corporate Financial ????..

 

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