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Hello, please I need help with my finance home work I do not need help with the first case, only with the second follow up
Hello, please I need help with my finance home work I do not need help with the first case, only with the second follow up case after they choose the U.S source. Thank you
Finance Homework Case 2 In this fictitious case, you continue in your role as a financial analyst in the Automotive Strategy staff of Millennial Automotive Company, a global manufacturer of automotive vehicles and products. Your responsibilities include evaluating the financial and strategic implications of corporate investment decisions. There is new information regarding the analysis you did for the first case, as outlined in the attached e-mail from Jess Greentree. 1. Review the attached material and prepare a one-page executive summary that addresses the impact of the new information. 2. Please include the following items in your summary: a. Financial impact of the new information b. Your response to Jess Greentree's request for help, based on the new information and why c. A brief discussion of additional information that would assist you in your evaluation of the alternatives From: Jess Greentree To: Analyst Subject: New Vehicle for US Market Date: July 28, 2014 Analyst, I just received some information that will have an impact on the analysis that you put together for our new vehicle (the Ray) last week. After the presentation last week that included your analysis, our leadership team decided to select the U.S. as the manufacturing location for the Ray. With this decision, our team is now considering the option of producing a second vehicle nameplate along with the Ray at the U.S. plant. Below you will find volume projections for the two vehicle segments and market share projections given different price points. As you will see below, the segment analysis and volume projections are unchanged for the Ray nameplate. However, Marketing and Sales has told us that if we introduce the new vehicle nameplate, the new vehicle will have a volume substitution impact of 20% on the Ray. You can assume variable cost inputs previously provided for the Ray are unchanged. For now, we can assume the new vehicle nameplate's variable cost inputs will be consistent with the Ray's cost inputs. Assuming that we produce the Ray and a second new vehicle nameplate at the U.S. location, I need your help to understand from a profit perspective the optimal volume and associated price point for the Ray nameplate and the optimal volume and associated price point for the new vehicle nameplate. Of course for this financial analysis you should now assume our investment required for our U.S. facility is a sunk costStep by Step Solution
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