Reference no: EM132459632

Question 1: What is your best estimate of the 2006 financial statements? (Please complete the highlighted portion of the attached spreadsheet titled "Class Worksheet"). As a starting point, assume that Allianz makes the expected $3 million dividend to National, its parent company. Hence, the balance sheet will be balanced by adjusting the amount of the bank loan. This implies a possible renegotiation with the bank. Once the forecast is completed, consider the effects on the borrowing amount from changing the dividend or capital expenditure choices.

Question 2: Clearly, Alliance must choose between (a) making the principal repayment to the bank, (b) making the capital investments, and (c) making the dividend payment to National. What is your recommendation? And what is your justification?

Question 3: Assume you chose to renegotiate with the bank-how would you approach the bank, and what arguments would you put forward?

Question 4: Assume you chose to skip the dividend-how would you approach National, and what arguments would you put forward