Discounting the terminal value, Financial Accounting

Assignment Help:

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 [email protected]. 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.


Related Discussions:- Discounting the terminal value

The three certainties-express trusts-trust laws and accounts, The three cer...

The three certainties A trust will be valid only if the three certainties are present i.e. certainty of words, certainty of subject, and certainty of objects.   1. Certainty

Selective inventory control, ABC Analysis: ABC that is Always Better Co...

ABC Analysis: ABC that is Always Better Control analysis is an application of the principle of 'Management by Exception' to the field of inventory control. If we seem at the in

The accounting equation., Indicate how each of the following transactions a...

Indicate how each of the following transactions affects the accounting equation. a.Purchase of supplies on account. b.Payment of wages. c.Cash sale of goods for more than their cos

Real estate mortgage investment conduit, Real Estate Mortgage Investment Co...

Real Estate Mortgage Investment Conduit (REMIC) - An entity which holds a fixed pool of mortgages and issues multiple classes of interest in itself to investors. A qualified REMIC

State the users of accounting information, State the users of accounting in...

State the users of accounting information Environment has brought new challenges for managers and other users of accounting information. Their requirements have changed and bot

Irs, I am looking for the solutiotns to this problem. Using the informat...

I am looking for the solutiotns to this problem. Using the information provided below, complete Aspen Ridge limited partnership%u2019s page 1 of Form 1065; complete Schedule K o

Steps for preparing final accounts-branches, Steps for preparing Final Acco...

Steps for preparing Final Accounts The following steps should be followed in preparing the final accounts where we have a foreign branch. 1. Update the trial balance of the br

The most common critical point for recognizing revenue, for a typical manuf...

for a typical manufacturing company, the most common critical point for recognizing revenue is the date a an order is recieved b. production is completed c the product is delievere

Evaluate equivalent annual cost, Q. Evaluate Equivalent annual cost? Th...

Q. Evaluate Equivalent annual cost? There are a number of techniques to answering this question and two are presented. The first difficulty is in deciding which broad approach

Writing a dissertation, I want to do a custom dissertation on IAS 40 invest...

I want to do a custom dissertation on IAS 40 investment property which needs to include a brief outline, positive as well as negative international critique with respect to the sta

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd