Reference no: EM131185211
Analytical Reports
22 unread replies.22 replies.
Organizing Reports: Structuring Analytical Reports
Three years ago, your company (a carpet manufacturer) modernized its Georgia plant in anticipation of increasing demand for carpets. Because of the depressed housing market, the increase in demand for new carpets has been slow to materialize. As a result, the company has excess capacity at its Georgia and California plants. On the basis of your research, you have recommended that the company close the California plant. The company president, J. P. Lawrence, has asked you to prepare a justification report to support your recommendation. Here are the facts you gathered by interviewing the respective plant managers:
Operational Statistics
• Georgia plant: This plant has newer equipment, productivity is higher, it employs 100 nonunion production workers, and it ships $12 million in carpets a year. The hourly base wage is $16.
• California plant: California plant employs 80 union production workers and ships $8 million in carpets a year. The hourly base wage is $20.
Financial Implications
• Savings by closing California plant: (1) Increase productivity by 17%; (2) reduce labor costs by 20% (total labor savings would be $1 million per year; see assumptions); (3) annual local tax savings of $120,000 (Georgia has a more favorable tax climate).
• Sale of Pomona, California, land: Purchased in 1952 for $200,000. Current market value $2.5 million. Net profit (after capital gains tax) over $1 million.
• Sale of plant and equipment: Fully depreciated. Any proceeds a windfall.
• Costs of closing California plant: One-time deductible charge of $250,000 (relocation costs of $100,000 and severance payments totaling $150,000).
Assumptions
• Transfer 5 workers from California to Georgia. • Hire 45 new workers in Georgia. • Lay off 75 workers in California. • Georgia plant would require a total of 150 workers to
produce the combined volume of both plants.
QUESTIONS TO PONDER
a. Which approach (focus on conclusions, recommendations, or logical arguments) will you use to structure your report to the president? Why?
b. Suppose this report were to be circulated to plant managers and supervisors instead. What changes, if any, might you make in your approach?
c. List some conclusions that you might draw from the above information to use in your report.
d. Using the structure you selected for your report to the president, draft a final report outline with first- and second-level informative headings.
What was the cost of the annuity to stickney
: June Stickney purchased an annuity on January 1, 2016, which, at a 12% annual rate, would yield $6,000 each June 30 and December 31 for the next 6 years. What was the cost of the annuity to Stickney?
|
What is the expected quarterly return for the investment
: Mary has an investment worth 55,500 dollars. The investment will make regular, fixed quarterly payments of 1,100 dollars to Bob forever with the first regular payment expected in 3 months from today. What is the expected quarterly return for the inve..
|
Ski resort is considering installing new ski lift
: The owner of a ski resort is considering installing a new ski lift, which will cost $750,000. Expenses for operating and maintaining the lift are estimated to be $1,500 per day when operating. The owners wish to recover any invested capital within fi..
|
Calculation the present value and cash payment reduction
: Please calculation the Present value and cash payment reduction. Company B agrees to pay Company A $200,000 at the end of each of the next 5 years, with discount rate 7%.
|
Organizing reports-structuring analytical reports
: Three years ago, your company (a carpet manufacturer) modernized its Georgia plant in anticipation of increasing demand for carpets. Because of the depressed housing market, the increase in demand for new carpets has been slow to materialize. Georgia..
|
Calculate the payment net of discount
: A store offers two payment plans. Under the installment plan, you pay 12.5% down and 12.5% of the purchase price in each of the next 7 years. If you pay the entire bill immediately, you can take a 15% discount from the purchase price. Calculate the p..
|
Plan on making your first savings deposit
: You saving up to buy a car, you plan on making your first savings deposit one year from today, and then making deposits for the following 3 years. These are the amounts you plan to save at the end of each year: You expect to earn an annual rate of 6%..
|
Discuss how we actually derive a budget
: Let's discuss how we actually derive a budget. Discuss the five basic steps of budgeting and how each are determined. What are some of the difficulties that can arise in this process, specifically for HCO's?
|
Most glaring issue with IRR via an example
: Let’s examine the most glaring issue with IRR via an example. A friend offers you an "investment." He knows that every year there is one day when some lottery numbers are fixed. Based on his insider knowledge, if you invest $2 with him, he will retur..
|