Energy- Missouri Can Company bought Atlas Energy to enter in the energy business. Atlas was a prestigious company to purchase since it was sole supplier to Florida and of six organizations in USA to buy gas from a major source. Atlas was a profitable investment with low risk. The negative net present value of -$6 million indicates the investment doesn’t create profits for the energy segment. The consults forecasted that revenue increased around 8% per year in the absent of investment for the exploration and production division. Energy should put emphasis on the creation product orientation than marketing strategies. The decision to end the exploration projects is very important. MCC doesn’t have the capital for expensive exploration projects
…show more content…
The consultants estimated that the company required building a new competitive plant of total cost around $1,000,000,000 and would take about 6 years from the plant went on line. The management expected cash flow and its present values of negative -$23 million that is shown in fourth table. The consultant believed that profits after the investment or new plant at 3%-6% per year will not help the company. Proper scheduled Maintenance and no job training for the workers decrease production. The forest production division contains paperboard and timber plant. In the paperboard division, Missouri competitions designed new plants that created quality products at a low cost. This created no return on investment and declined profits. The cash flows for this sector would go negative for next six years. Consultants believed felt that the range for negative cash flows would be $100,000,000 to $125,000,000. This segment could be purchased today for $600,000,000. Low Price Fluctuations was an issue in the timber plant but making good profits was available. In the next 6 to 10 years look for assets to increase from 20% to 60%. Timber holder is a great investment to continue since it stop big price discrepancies in the segment. In order to stay profitable employee training and maintenance standards budget needs to be increased. New and enhanced technology should be available to
The consultants estimated that the company required building a new competitive plant of total cost around $1,000,000,000 and would take about 6 years from the plant went on line. The management expected cash flow and its present values of negative -$23 million that is shown in fourth table. The consultant believed that profits after the investment or new plant at 3%-6% per year will not help the company. Proper scheduled Maintenance and no job training for the workers decrease production. The forest production division contains paperboard and timber plant. In the paperboard division, Missouri competitions designed new plants that created quality products at a low cost. This created no return on investment and declined profits. The cash flows for this sector would go negative for next six years. Consultants believed felt that the range for negative cash flows would be $100,000,000 to $125,000,000. This segment could be purchased today for $600,000,000. Low Price Fluctuations was an issue in the timber plant but making good profits was available. In the next 6 to 10 years look for assets to increase from 20% to 60%. Timber holder is a great investment to continue since it stop big price discrepancies in the segment. In order to stay profitable employee training and maintenance standards budget needs to be increased. New and enhanced technology should be available to