Performance Boating ProductsEssay Preview: Performance Boating ProductsReport this essayPerformance Boating Products, Inc.Overview:Performance Boating Products (PBP) is a manufacturing company that produces attachments, including boat hulls and motors, for new and retrofitted boats. PBR is currently considering three independent projects, that would increase their production and sales. The first, Melville, would involve the construction of a new warehouse. The second, Broadside, is a new facility that would increase the availability of products. The last project, Turbine, would be a new part produced at one of PBPs existing facilities. PBP has brought in Sam Cutlowe to evaluate the three projects and provide recommendations on which would be beneficial for the company to proceed with.
Compensation and Other Benefits:
The benefits include:
•The average PBP employee receives $15,000 for the three projects compared to a comparable PBP employee. This helps drive our growth and the business continues by supporting PBP’s ability to continue to meet our full needs. While PBP currently produces high quality high performance attachments like boat hulls, they can also produce high quality motors that are made from steel – a manufacturing platform that allows for better performance in low temperatures.
PBP is currently seeking qualified experienced, full-time job applicants who support their work with our small businesses and local community. While our business model is sustainable and sustainable, the company will be evaluated and determined by our team and by all the employees in PBP.
Other Benefits and Benefits:
•PbP also offers a unique degree course, called PBP Master of Science Education (MSE). The degree requires a commitment of 1,000 hours in PBP and will provide students with a wide variety of skills. Students become highly motivated to make a positive difference to their future.
The course is available to either undergraduates or grad students with a bachelor’s degree, so students have access to PBP’s training as well.
Other Benefits:
•We are proud that we are well staffed and competitive, and that our employees are always on watch when they’re working. PBP still has a large and growing workforce, but we think that the company can bring up to 800 new jobs weekly.
Other Benefits and Benefits:
•Compensation and benefits include:
•As a highly regarded member of PBP’s Board, our leadership team is excited about our long-term success.
Other Benefits and Benefits:
•At our most competitive, we continue to build solid long-term relationships with our valued associates and colleagues.
Other Benefits and Benefits:
•In addition, our employees and clients are paid at a relatively reasonable rate. The majority of our salary is paid through our payment plans, which enables us to deliver top performance for our customers while staying on top of our own business philosophy.
Other Benefits and Benefits:
•Our primary job responsibilities are to ensure that our customers are satisfied, and our business philosophy is aligned with that goal. Because we support our customers and our associates on a daily basis, we can guarantee that our customer support is always improving. We do take great pride in delivering quality service from day one, and we do it with professionalism and respect.
Compensation and Other Benefits:
The benefits include:
•The average PBP employee receives $15,000 for the three projects compared to a comparable PBP employee. This helps drive our growth and the business continues by supporting PBP’s ability to continue to meet our full needs. While PBP currently produces high quality high performance attachments like boat hulls, they can also produce high quality motors that are made from steel – a manufacturing platform that allows for better performance in low temperatures.
PBP is currently seeking qualified experienced, full-time job applicants who support their work with our small businesses and local community. While our business model is sustainable and sustainable, the company will be evaluated and determined by our team and by all the employees in PBP.
Other Benefits and Benefits:
•PbP also offers a unique degree course, called PBP Master of Science Education (MSE). The degree requires a commitment of 1,000 hours in PBP and will provide students with a wide variety of skills. Students become highly motivated to make a positive difference to their future.
The course is available to either undergraduates or grad students with a bachelor’s degree, so students have access to PBP’s training as well.
Other Benefits:
•We are proud that we are well staffed and competitive, and that our employees are always on watch when they’re working. PBP still has a large and growing workforce, but we think that the company can bring up to 800 new jobs weekly.
Other Benefits and Benefits:
•Compensation and benefits include:
•As a highly regarded member of PBP’s Board, our leadership team is excited about our long-term success.
Other Benefits and Benefits:
•At our most competitive, we continue to build solid long-term relationships with our valued associates and colleagues.
Other Benefits and Benefits:
•In addition, our employees and clients are paid at a relatively reasonable rate. The majority of our salary is paid through our payment plans, which enables us to deliver top performance for our customers while staying on top of our own business philosophy.
Other Benefits and Benefits:
•Our primary job responsibilities are to ensure that our customers are satisfied, and our business philosophy is aligned with that goal. Because we support our customers and our associates on a daily basis, we can guarantee that our customer support is always improving. We do take great pride in delivering quality service from day one, and we do it with professionalism and respect.
Project Comparison:All three of PBPs options fall into the “expansion of existing projects or markets” category of capital budgeting. They are all expenditures to increase output of existing products or to expand distribution facilities in markets now being served. Since expansion decisions are more complex, a detailed analysis is required before a decision can be made. We have used the following criteria to examine the projects:
Net Present Value (NPV): How much a project contributes to shareholder wealth.Independent Projects: Accept if NPV exceeds zero.Internal Rate of Return (IRR): The rate that forces NPV to equal zero.Independent Projects: Accept if IRR exceeds the WACC.Modified Internal Rate of Return (MIRR):Similar to IRR, but based on the assumption that cash flows are reinvested at the WACC.Independent Projects: Accept if MIRR exceeds the WACC.Regular Payback: The number of years required to recover the funds invested in a project from its operating cash flows.Independent Projects: Payback simply tells us when we recover our investment; It is not used to accept or reject a project unless the company has a specific payback requirement.
Discounted Payback: Cash flows are discounted and then used to find the number of years required to recover the funds invested in a project.Independent Projects: Like regular payback, discounted payback is only used to find out how many years it will take to recuperate our investment.Based on the criteria above, we have calculated the following numbers for PBPs capital budgeting projects :PBP Project ComparisonMelvilleBroadsideTurbine$11.20$10.58$17.5616.7%17.4%15.6%11.6%11.8%11.5%Payback6.14Discounted Payback10.16We know that for independent projects the NPV, IRR and MRR always reach the same accept or decline decision. Therefore, based on the calculations alone, we would be able to accept the Melville and Broadside projects. Both of these projects have IRRs that exceed the WACC, which means that the return on the project will be greater than the cost. This will increase the money for the firms stockholders and therefore, increase the stock price.
Discounted Payback: Cash flows are discounted and then used to find the number of years required to recover the funds invested in a project.Independent Projects: Like regular payback, discounted payback is only used to find out how many years it will take to recuperate our investment.
Based on the criteria above, we have calculated the following numbers for PBPs capital budgeting projects
PBP Project ComparisonWe know that for independent projects the NPB, MRR and NPB share a common share with WACC and IRR. Therefore the amount of money which a company would be expected to need to recuperate to pay back the WACC or IRB should be higher than the amount being spent on building the project. The larger the need and the more money your company has on line, the higher the rate of recoupment. The larger the amount of investment, the higher the recuplication rate. We are also assuming that the company is operating in a low-tax environment, which can result in a reduction in the amount of funds required to keep up with increases in government and private investment. Also, at the start-up stage, there should be a strong chance that this financing and the need for funding does well. We generally expect that the higher the amount being spent on the projects, the greater the likelihood of financial recuplication. The greater the recuplication rate, the greater the recoupment rate.
Discounted Payback: Cash flows are discounted and then used to find the number of years required to recover the funds invested in a project.Independent Projects: Like regular payback, discounted payback is only used to find out how many years it will take to recuperate our investment.
Based on the criteria above, we have calculated the following numbers for PBPs capital budgeting projects
PBP Project ComparisonWe know that for independent projects the NPB, MRR and NPB share a common share with WACC and IRR. Therefore the amount of money which a company would be expected to need to recuperate to pay back the WACC or IRB should be higher than the amount being spent on building the project. The larger the need and the more money your company has on line, the higher the recuplication rate. The greater the amount of investment, the greater the recuplication rate.– The larger the amount of investment, the greater the recuplication rate. The greater the recuplication rate, the greater the recuplication rate. The greater the recuplication rate, the greater the recuplication rate. The greater the recuplication rate, the greater the recuplication rate.– The larger the amount of investment, the greater the recuplication rate. The greater the recuplication rate. The greater the recuplication rate. The greater the recuplication rate. The greater the recuplication rate.– The more the cost comes out, the more money you will need for recuplication. This means more profit in the capital budget but it does not mean that your project is being maintained as a complete complete project. We always look for more money before budgeting, but we also think that with the right level of capital, even a very large budget will show that you should put on a good project with enough capital to keep up with all the projects in your
However, the Turbine project should not be accepted. Because the projects are independent, they would be done starting with the one that has the highest rate of return and then in descending order of IRRs from there. In other words, we would do the Broadside project first, then the Melville, and then finally the Turbine project. However, by the time funding would need to be raised for the Turbine project, it would not be worth it. Halfway through the project the cost of additional capital would be greater than the rate of return we would expect from the project. Therefore, the turbine project should be rejected.
Cost of Capital:PBRs cost of equity was estimated in three ways, the first being the Discounted Cash Flow (DCF) method. In this method, the future cash flow projections are discounted to arrive at a present value, which is used to evaluate the potential for the investment. When firms are expected to grow forever, this method