Should Crafty Motors Expand?
Number of pages:
14
ABSTRACT:
A 14 page paper assessing the monetary implications of proposed expansion of an automotive body shop. The owner intends to retire after ten years and will sell the business at the end of that term. For the present, she needs to determine: (1) whether the expansion can be profitable; and (2) how she should finance it. These determinations cannot be made without assessing costs in terms of present and future dollars. It is necessary to assess the proposed project in terms of total net present value in order to predict profitability and compare the implications of financing decisions. Two appendices contain NPV calculations for expansion at 14, 20 and 25 percent discount rates as well as NPV determination for total cost of loan and lease financing options. The paper concludes that Crafty should expand, using loan proceeds if the economic climate is strong, cash if it is not. Bibliography lists 2 sources.
FILE NAME:
File: CC6_KSacctCrafty.rtf
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