Project 1. As instructed by your professor, obtain the annual report of a well-known company.

Requirements 1. Take the role of a loan committee of ABN-Amro, a large banking company headquartered in Amsterdam. Assume the company has requested a loan from ABN-Amro. Analyze the company’s financial statements and any other information that you need to reach a decision regarding the maximum amount of money that you would be willing to lend. Go as deeply into the analysis and the related decision as you can. Specify the following:

a. The length of the loan period; that is, over what period will you allow the company to pay you back?

b. The interest rate you will charge on the loan. Will you charge the prevailing interest rate, a lower rate, or a higher rate? Why?

c. Any restrictions you will impose on the borrower as a condition for giving the loan.

Note: The long-term debt note to the financial statements gives details of the company’s existing liabilities.

2. Write your group decision in a report addressed to the bank’s board of directors. Limit your report to 500 words.

3. If your professor directs, present your decision and analysis to the class. Limit your presentation to 10–15 minutes.

Project 2. You are the owner of a company that is about to “go public,” i.e., issue its shares to outside investors. You wish to make your company look as attractive as possible in order to raise $1 million in cash and expand the business. At the same time, you want to give potential investors a realistic picture of your company.

Requirements 1. Design a booklet (not more that 1,300 words or five pages) to portray your company in a way that will enable outsiders to reach an informed decision as to whether they should buy some of your shares. The booklet should include the following:

a. Name and location of your company.

b. Nature of the company’s business (be as detailed as possible).

c. How you plan to spend the money you raise.

d. The company’s comparative Income Statement, statement of changes in equity, Balance Sheet, and statement of cash flows for two years: the current year and the preceding year. Make the data as realistic as possible with the intent of receiving $1 million.
2. If directed by your professor, make a copy of the booklet for each member of your class.
Distribute copies to the class and present your case with the intent of interesting your classmates in investing in the company. Limit your presentation to 10–15 minutes.