7:56 f Case Assignment (Due 12-03-2020).... ... 1 of 7 Sangria Topochico - The Capital Budgeting Decision done by his al maretFrancisco Javie about the possiblement et le Sangria Topochio. The idea of Sangria Tepechice care about the mother when Miested a seminar on youth obesity rated by a local high school at his children and Exam he had otten heard of the rising obesity problem in Mexico Mole was very died by the indicating how the obesity rate in Mexice had pled since 1980 and 62.5% of the people 15 years and older whether he wewnight Even more shocking to Marsa boat on this statistic Mexico what the light the would surpeing the United Sustes After the seminar, Maria discuted the idea of Sangrie Topochi aloite carte of drink with Francisco Javier Francisco was excited about the des and the opportunity launch something ses, especially given that the company haft roduced a sospendatel five year. However, Francisco toght market study should be done progede pa demand befine the firmade took the extent Company Background Sidral Mundet Sol is a small privately owned carbonated soft drink company based in Mexico. A retired executive from a popular fad.food restaurant chois, Juan Manuel Sounded in During career as a restaurant caecutive, Juan camed that Mexicanadiens of social and the de pop. Many would drink sodat quench their dintre os die toe lack of type deinkable water. With the influx of international and feda por Mercole consumption of carbonated soft drinks per capita in the world. The rage per capac 40% higher than the United States, 163 liters (43 galo per year, while the United Station 118 tier (31 gallionaccording to statistics presented by the internal con and the Mexican NGO Consumer's Power. Due to the high obesity problem, health and Mexico ha denunded the government impose riskin only reduce consumption, but the tax revene could also be used to get health is ted Exhibit 1. Rates of overweight and Obesity Perons by Country (2010) Overweight Obesity 7:56 + Case Assignment (Due 12-03-2020).... ... 2 of 7 Exhibit 2. Rutes of Overweight and Obesity Pressure by Country (2010) The market leaders for carbonated so drinks in Mexicowe Ceco Cole Pope Cole De Pepper Seapple, and Grupe Penafie. Together, they accounted fee cold market share of the with Cora Cola being the major player. The Mexica soft drink market (rodos dale slett carbonates. RTD to offeefunctional drinks, fruit vegetable juices, and other in lattal revenues of $19 bis 2011, representing a compound a gwireCAG)3.300 and 2011 Market consumption volumes increased with a CAGR of 49% between 2007 and 2011 Teaching a total of 49. Hilliers in 2011 Mano though these popular international brands commanded prices that might be out of here poorerwegment of the population. To capture this market, bestand the company readed carbonated sed drinks with similar tastes, het tabout half the price. His producte de la cola cabetes and socola carbonate, chalem me arrangert Sidel Mundet Sol's products were only in all independent per descom in Mexico. The limided the supermarkets and hyperma became could see margin in these largestores. Moreover, most of the consumers, especially the ideolowe shopped at all, independent owner of the independent 7:56 f Case Assignment (Due 12-03-2020).... ... 3 of 7 Sidral Mundet Sol's products were only in small independences ime in Mexico. The firm wide the supermarket and hypere could be magis in these large stores. Morcover, most comply the middle shopped a small, independent grocery stores To create on the owner of the dependene stores were pre incentives to personally the past Satsinrednicy million pes in 1998 to about 900 milice pacem 2011. In 2007, Maria Guadalupe. Jos only on, tok ver the bus when nexpectedly peel way. Mara started working on the sales side of the business two years before his bedoeld pathered a few valuable tips on how to the businefnum his father, which aller conservative businessman. A year after Maria took over the business, the global financial at The CCOO dewiam in Mexico actually benefited the low price soda busino Dance dramatically as many consumers boome price conscious and witched from intentional and Private label. Sidral Munk Soled by son from 2001 2009. without the firm changing any of instruction. The comme profit margin) also had been increasing in the last few years Exhibit 2 Sidral Mundet Sol Sales and Return on Sale S. 1 7:56 + Case Assignment (Due 12-03-2020).... ... 4 of 7 The proposal Reading once again the executive summary of the report. Mais called what his father wel times during the two years he was working with him. Due the company otheke Imest only when you are confident there is sufficient demand for a new product and when you here the financial As a financial Marie felt the incident Dute mongal and profitability in the last few years, Sidral Mundet So had accumulated set of ul. With solid financial performance and steady caktowe bankar had med en him five year, 16% interest term loan to launch Sangria Taction the police estimated that with 27 of the wooded capital bomowed, the 200 dequity that we an 12 weightolaverage cost of capital for this project The bigger question lingering in Marie's mind ww whether there will be sufficient del REW, calon peduct line. Even though the demand for low.cedes Mesi they med to be consumed mainly by the middle-to-encoment of the The majority of the lower-income people still consumed only the real big tits It wasn't clear whether this was because the low-income group lacked the mostheses problem, or because there were not too many low-priced low-calone woda optimale former. De oudok for re-price, low-calorie about might be sig time. If it were the latter it might be the perfect timing Mules Sale Topochico Francisco hired constant to do a market ay night at Maria duced the Saga Topochico with him. The constant stimuted that the company could sell off these zero-calore contes a month projected price of five presa in This meals expected for period of five you the same price. The market study took complete and cost the con five millises whicho Francisco al padre Since the writing online plant winning 100 producing report the proposal called for a fleet of new, em-tomto bling and eng machines de for The total cost of the machines, including installawatta be see This amount could be fully deprecated on a straight-line baise peredo freya France that the purchase of these machines would ruble Sidral Mundet Sol to reduce cut of labor and therefore the price to the customers. putting the firm is competitive with paper maintenance, these machines could produce tkast 600,000s of cards Francisco al estimated that the machines would have stole value of four le years' time, if the company were to either shut down the production of Santa Technort these machines with fully automated that time The new machines would be lowed in an exccupied ex by the main production of Mundo Sol. The sex was also large enough to store the finished products before they were shipped to ay or Maria's father built theme years ago when he planned to return water business. He died before we de his plan. Then there though Maris recently receive an offer to lease out the pace far 10.000 pesos y Francisco determined that additional working capital was needed to cliente of this new product line le proposed pengawal mely a legal production. To encounge the independent grocery stores to carry the new product line, he propened offering a longer collection period leting the goversy in dysleltemal 20 As far as accounts payable, he would follow the company's oral policy andere days 7:56 f Case Assignment (Due 12-03-2020).... ... 5 of 7 offering a longer collection period ferng the proces pay in 3 days, tead of bed des As far as accounts payable, he would follow the company's omal policy, and the The proposal to outlined the various estimates of production and overhead agus Raw materials needed to produce the sole were estimated to be pews per dites, while the chergy costs per month were estimated to be 180,000 poses and 50,00 per petely the incremental poneral administrative and selling expenses were quite modest, stimehe 300.000 year, the new product could be wild by Sodral Mundet Securrentes time and distribution channels. The counting department typically charged 15 sales nevado new project Glancing back this notes, Maria od pondering. The market say soomed indicate demand for the new product line. What be cally wed was that the neo-calle carte tode the sale of his exiting products the regular sodat. The markedy pred tem Grosion could cost the finnas much as 800.000 pois of the tax con flows for you the of 30% for both income and capital gai.could be add value to the fim by taking Appendix 1. Sidral Mundet Set Income Statements for the Year Ending December 31 hende pen Income Item 2010 Sales 2.000 100.0% 2.341 100,0% 101 10 COIS 1984 4560 43 292.516 45.54 355932 4521 41 Marketing & Selling Expenses 130359 18.7% 150,322 11 10 General Administrative Expenses 3.5.09 101622 LTDA 16.01 136.9 16.35 Deprecat EBIT 6.771 9 775 156 55 56 $55 SET SI 140 6.0 68.455 19037 7 11.50 ERT Tes 30% Net ne Dividende Retained Taming TAS 21.49 4513 30,00 24419 20.000 1 7:56 f Case Assignment (Due 12-03-2020).... ... 6 of 7 Appredis 2. Sudiral Mundet Sol-Balance sheet of cember 31 Chander Heeve SIN 32.5 15. . TRES 400 Carrer M 177.000 Acom 459,210 14.06 224.114 25 26 382.191 100454 Total A Little Worth Account Payable Accede Short-term Cena 3.5 3,765 3 1904 35 3450 15.00 2013 RE es 3279 31 34 Lage Equy 11 5744 LOGO.SE 7:56 f Case Assignment (Due 12-03-2020).... ... 7 of 7 Agriment Questions 1 What are the background of the mentenanthe same 2. What are the relevant to loos? 1 Should we consider the crosion of the existing product-the repliedas in die als Why why 4 Calculate the projecte NPV, TRR and back period Perfumesitivity analyses and calculate the projet's PV, IR, ut pahat periodi sales volume inca 45 bi price increases 20% direct labor cost wwwterials increase * gy call imrans% & What are the benefits and risk of understanding this 7. Should Sangria Topochico undertake this project? You must submit a written report (5 pages) with any supporting material (cs.ced worksheets Mease turn in your case analysis by midnight on 1203 2030 through Blackhead to recove credits. All written assignments will be subject to submission to anti-plagiarise New submissions will be accepted. 7:56 f Case Assignment (Due 12-03-2020).... ... 1 of 7 Sangria Topochico - The Capital Budgeting Decision done by his al maretFrancisco Javie about the possiblement et le Sangria Topochio. The idea of Sangria Tepechice care about the mother when Miested a seminar on youth obesity rated by a local high school at his children and Exam he had otten heard of the rising obesity problem in Mexico Mole was very died by the indicating how the obesity rate in Mexice had pled since 1980 and 62.5% of the people 15 years and older whether he wewnight Even more shocking to Marsa boat on this statistic Mexico what the light the would surpeing the United Sustes After the seminar, Maria discuted the idea of Sangrie Topochi aloite carte of drink with Francisco Javier Francisco was excited about the des and the opportunity launch something ses, especially given that the company haft roduced a sospendatel five year. However, Francisco toght market study should be done progede pa demand befine the firmade took the extent Company Background Sidral Mundet Sol is a small privately owned carbonated soft drink company based in Mexico. A retired executive from a popular fad.food restaurant chois, Juan Manuel Sounded in During career as a restaurant caecutive, Juan camed that Mexicanadiens of social and the de pop. Many would drink sodat quench their dintre os die toe lack of type deinkable water. With the influx of international and feda por Mercole consumption of carbonated soft drinks per capita in the world. The rage per capac 40% higher than the United States, 163 liters (43 galo per year, while the United Station 118 tier (31 gallionaccording to statistics presented by the internal con and the Mexican NGO Consumer's Power. Due to the high obesity problem, health and Mexico ha denunded the government impose riskin only reduce consumption, but the tax revene could also be used to get health is ted Exhibit 1. Rates of overweight and Obesity Perons by Country (2010) Overweight Obesity 7:56 + Case Assignment (Due 12-03-2020).... ... 2 of 7 Exhibit 2. Rutes of Overweight and Obesity Pressure by Country (2010) The market leaders for carbonated so drinks in Mexicowe Ceco Cole Pope Cole De Pepper Seapple, and Grupe Penafie. Together, they accounted fee cold market share of the with Cora Cola being the major player. The Mexica soft drink market (rodos dale slett carbonates. RTD to offeefunctional drinks, fruit vegetable juices, and other in lattal revenues of $19 bis 2011, representing a compound a gwireCAG)3.300 and 2011 Market consumption volumes increased with a CAGR of 49% between 2007 and 2011 Teaching a total of 49. Hilliers in 2011 Mano though these popular international brands commanded prices that might be out of here poorerwegment of the population. To capture this market, bestand the company readed carbonated sed drinks with similar tastes, het tabout half the price. His producte de la cola cabetes and socola carbonate, chalem me arrangert Sidel Mundet Sol's products were only in all independent per descom in Mexico. The limided the supermarkets and hyperma became could see margin in these largestores. Moreover, most of the consumers, especially the ideolowe shopped at all, independent owner of the independent 7:56 f Case Assignment (Due 12-03-2020).... ... 3 of 7 Sidral Mundet Sol's products were only in small independences ime in Mexico. The firm wide the supermarket and hypere could be magis in these large stores. Morcover, most comply the middle shopped a small, independent grocery stores To create on the owner of the dependene stores were pre incentives to personally the past Satsinrednicy million pes in 1998 to about 900 milice pacem 2011. In 2007, Maria Guadalupe. Jos only on, tok ver the bus when nexpectedly peel way. Mara started working on the sales side of the business two years before his bedoeld pathered a few valuable tips on how to the businefnum his father, which aller conservative businessman. A year after Maria took over the business, the global financial at The CCOO dewiam in Mexico actually benefited the low price soda busino Dance dramatically as many consumers boome price conscious and witched from intentional and Private label. Sidral Munk Soled by son from 2001 2009. without the firm changing any of instruction. The comme profit margin) also had been increasing in the last few years Exhibit 2 Sidral Mundet Sol Sales and Return on Sale S. 1 7:56 + Case Assignment (Due 12-03-2020).... ... 4 of 7 The proposal Reading once again the executive summary of the report. Mais called what his father wel times during the two years he was working with him. Due the company otheke Imest only when you are confident there is sufficient demand for a new product and when you here the financial As a financial Marie felt the incident Dute mongal and profitability in the last few years, Sidral Mundet So had accumulated set of ul. With solid financial performance and steady caktowe bankar had med en him five year, 16% interest term loan to launch Sangria Taction the police estimated that with 27 of the wooded capital bomowed, the 200 dequity that we an 12 weightolaverage cost of capital for this project The bigger question lingering in Marie's mind ww whether there will be sufficient del REW, calon peduct line. Even though the demand for low.cedes Mesi they med to be consumed mainly by the middle-to-encoment of the The majority of the lower-income people still consumed only the real big tits It wasn't clear whether this was because the low-income group lacked the mostheses problem, or because there were not too many low-priced low-calone woda optimale former. De oudok for re-price, low-calorie about might be sig time. If it were the latter it might be the perfect timing Mules Sale Topochico Francisco hired constant to do a market ay night at Maria duced the Saga Topochico with him. The constant stimuted that the company could sell off these zero-calore contes a month projected price of five presa in This meals expected for period of five you the same price. The market study took complete and cost the con five millises whicho Francisco al padre Since the writing online plant winning 100 producing report the proposal called for a fleet of new, em-tomto bling and eng machines de for The total cost of the machines, including installawatta be see This amount could be fully deprecated on a straight-line baise peredo freya France that the purchase of these machines would ruble Sidral Mundet Sol to reduce cut of labor and therefore the price to the customers. putting the firm is competitive with paper maintenance, these machines could produce tkast 600,000s of cards Francisco al estimated that the machines would have stole value of four le years' time, if the company were to either shut down the production of Santa Technort these machines with fully automated that time The new machines would be lowed in an exccupied ex by the main production of Mundo Sol. The sex was also large enough to store the finished products before they were shipped to ay or Maria's father built theme years ago when he planned to return water business. He died before we de his plan. Then there though Maris recently receive an offer to lease out the pace far 10.000 pesos y Francisco determined that additional working capital was needed to cliente of this new product line le proposed pengawal mely a legal production. To encounge the independent grocery stores to carry the new product line, he propened offering a longer collection period leting the goversy in dysleltemal 20 As far as accounts payable, he would follow the company's oral policy andere days 7:56 f Case Assignment (Due 12-03-2020).... ... 5 of 7 offering a longer collection period ferng the proces pay in 3 days, tead of bed des As far as accounts payable, he would follow the company's omal policy, and the The proposal to outlined the various estimates of production and overhead agus Raw materials needed to produce the sole were estimated to be pews per dites, while the chergy costs per month were estimated to be 180,000 poses and 50,00 per petely the incremental poneral administrative and selling expenses were quite modest, stimehe 300.000 year, the new product could be wild by Sodral Mundet Securrentes time and distribution channels. The counting department typically charged 15 sales nevado new project Glancing back this notes, Maria od pondering. The market say soomed indicate demand for the new product line. What be cally wed was that the neo-calle carte tode the sale of his exiting products the regular sodat. The markedy pred tem Grosion could cost the finnas much as 800.000 pois of the tax con flows for you the of 30% for both income and capital gai.could be add value to the fim by taking Appendix 1. Sidral Mundet Set Income Statements for the Year Ending December 31 hende pen Income Item 2010 Sales 2.000 100.0% 2.341 100,0% 101 10 COIS 1984 4560 43 292.516 45.54 355932 4521 41 Marketing & Selling Expenses 130359 18.7% 150,322 11 10 General Administrative Expenses 3.5.09 101622 LTDA 16.01 136.9 16.35 Deprecat EBIT 6.771 9 775 156 55 56 $55 SET SI 140 6.0 68.455 19037 7 11.50 ERT Tes 30% Net ne Dividende Retained Taming TAS 21.49 4513 30,00 24419 20.000 1 7:56 f Case Assignment (Due 12-03-2020).... ... 6 of 7 Appredis 2. Sudiral Mundet Sol-Balance sheet of cember 31 Chander Heeve SIN 32.5 15. . TRES 400 Carrer M 177.000 Acom 459,210 14.06 224.114 25 26 382.191 100454 Total A Little Worth Account Payable Accede Short-term Cena 3.5 3,765 3 1904 35 3450 15.00 2013 RE es 3279 31 34 Lage Equy 11 5744 LOGO.SE 7:56 f Case Assignment (Due 12-03-2020).... ... 7 of 7 Agriment Questions 1 What are the background of the mentenanthe same 2. What are the relevant to loos? 1 Should we consider the crosion of the existing product-the repliedas in die als Why why 4 Calculate the projecte NPV, TRR and back period Perfumesitivity analyses and calculate the projet's PV, IR, ut pahat periodi sales volume inca 45 bi price increases 20% direct labor cost wwwterials increase * gy call imrans% & What are the benefits and risk of understanding this 7. Should Sangria Topochico undertake this project? You must submit a written report (5 pages) with any supporting material (cs.ced worksheets Mease turn in your case analysis by midnight on 1203 2030 through Blackhead to recove credits. All written assignments will be subject to submission to anti-plagiarise New submissions will be accepted