Discounting the terminal value, Financial Accounting

The Major Assignment Business Case Study is about American Cable Communications' proposed acquisition of the firm Air Thread Connections. The case study is available from the folder labelled ‘Major Assignment' in iLearn.
1. American Cable Communications' Senior Vice President for business development has engaged you to appraise the proposed acquisition. Accordingly, for the purpose of the Major Assignment you temporarily assume the role of Ms. Zhang (see case study page 5).
2. Consider the whole of the case study including background, supporting information and spread sheet.
3. Your task is to prepare a written appraisal report using a report format recommending whether the proposed acquisition should proceed. Include a clear justification.
4. Carefully read the enclosed Major Assignment Marking Rubric. In preparing your appraisal report make sure to consider each of the four marking criteria and your target proficiency.
Week 9 Friday 12th October 2012 2(3)
5. Your answers to the five questions listed under heading ‘Appraisal Questions' are intended to guide the appraisal, and should be clearly referred to in the appraisal report. Outline your answers to the five questions in a ‘pdf' file format attachment to the appraisal report.
6. Use the supplementary publisher spread sheet in your appraisal. The spread sheet is available from the folder labelled ‘Major Assignment' in iLearn. Include a print out of your spread sheet content in a ‘pdf' file format attachment to the appraisal report.
7 Avoid making simplified assumptions additional to those made in the case study. However, if you make assumptions in the appraisal report these should be clearly stated and have limited implications for your appraisal. Assumptions made should not contradict the pedagogical objectives of the major assignment.
8 Make sure that the appraisal is clearly informed by suitable corporate finance theory.

Appraisal Questions

1. Describe the methodology that you use to value Air Thread Connections [Hint: it may be possible to use more than one technique simultaneously].
2. Outline how you:
a. value cash flows for 2008 through 2012?
b. estimate the terminal value or going concern?
c. account for the non-operating investments in equity affiliates?
3. Explain the choice of the rate that you use in:
a. discounting un-levered FCF for 2008 through 2012
b. discounting the terminal value?
c. estimating the long-term growth?
4. Calculate the present value of Air Tread Connections on a going concern basis [Hint: use your long-term growth estimate in 3.c. above, and the supplementary publisher spread sheet.].
5. Calculate the total value of Air Thread Connections:
a. before considering any synergies
b. including synergies, assuming your estimates are correct [Hint: use the supplementary publisher spread sheet.].
Enquiries
9. Please direct ALL enquiries to the attention of the Unit-convenor. Mark your e-mail ‘Major
Assignment Enquiry - TT', and send it to AFIN353@mq.edu.au. Allow for 24 to 36 hours for a reply during week days.
Announcements
10 Please periodically monitor iLearn ‘Announcements' for information which may be broadcast about the major assignment.

Posted Date: 3/28/2013 12:50:31 AM | Location : United States







Related Discussions:- Discounting the terminal value, Assignment Help, Ask Question on Discounting the terminal value, Get Answer, Expert's Help, Discounting the terminal value Discussions

Write discussion on Discounting the terminal value
Your posts are moderated
Related Questions
#1. Quarter Corporation had the following transactions during the quarter ended June 30, 2010: Loss from tsunami damage (extraordinary) $985,000 Payment of fire insurance premium f

Illustration-statement of Changes in Net Assets-pension fund (a) What meetings of creditors must be held and for what purpose in the course of a creditors’ voluntary winding up

d. Prepare the summary journal entry required to transfer finished component kits from the Cutting Department to the Finishing Department in January. e. Compute the total cost assi

An item of plant was purchased for $100,000 on 1 January 2009. At that time its estimated residual value was $5,000. At 31 December 2009 prices, the residual value was estimated at

Wendy is evaluating a capital budgeting project that should last for 4 years. The project requires $ 800,000 of equipment. She is unsure what depreciation method to use in her anal

Individual taxpayers who don't itemize their deductions are entitled to a standard deduction amount by which to decrease ADJUSTED GROSS INCOME in arriving at taxable income. Amount

Statute of Limitations - This sets out the period within that actions may be brought upon claims or within which rights may be enforced. As it concerns to tax returns, statute of l

J inherited 30000 & decides to open a saloon.1/4/2016.under jasper.commits 10000 to the business .opens a a/c in the bank as jasper. What will be th capital amount in his books o

Will you please summarize this mission statement of AICPA'S "The AICPA's mission is to provide members with resources, information and leadership that enable them to provide val

Introduction to Pension funds Pension funds are normally set up to provide pension benefits to employees who have retired. The pension funds receive contributions mainly from e