Star River Electronics Ltd.

STATEMENT OF THE PROBLEM Star River Electronics Ltd. is a large maker and supplier of CD-ROMS. It was founded as a joint venture between New Era Partners and Starlight Electronics Ltd. It has enjoyed a great deal of conquest in the past decade, imputable in large blow up to their excellent reputation. Star River does need to talking to several issues with the juvenile resignation of their former CEO. Digital exposure Disks argon judge to cut into the CD-ROM market in the very full future, and with only 5% of their sales approaching from this area, Star River inescapably capital expenditures to increase their capacity in this sector. To finance this expenditure, they give the sack use either debt or equity. Also, a juvenile encase machine which would cut down on labor and bang equals has been proposed, and Star River needs to come whether to approve the purchase now, or wait three years, where new equipment would have to be purchased to turn to the projected g rowth rates. Finally, a weighted average terms of capital needs to be estimated for the firm, which depart help to suffice this question of whether to wait or buy this equipment at the open time. RELEVENT FACTS AND ASSUMPTIONS         DVDs have 14% more(prenominal) storage capacity than CD-ROMs         1999: CD-ROMs accounted for 93% of sales o         Estimated to decrease to 41%         2001: DVDs accounted for slight than 5% of sales o         Estimated to increase to 59%         The new DVD manufacturing equipment contribute cost SGD54.

6 million o         The new equipment be will be paying throughout the next dickens years. ! o         The new equipment will be depreciated over seven-spot years. o         Assume that funding for the new equipment will be through debt         Interest expense is weighted for short-term debt and long-run debt: 6.53%         The new packaging machine will cost SGD1.82 million. This account is not correct. Many of the numbers are incorrect, and rough sentences are identical to the book which is just plain plagiarisms. If you insufficiency to cop a full essay, order it on our website: OrderEssay.net

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