Case 24 Star River Electronics LTD Questions

 

 

STAR RIVER ELECTRONICS LTD. Questions 

1. Assess the the current financial financial health and recent financial performance of the company. What What strengths and/or weaknesses would you highlight to Adeline Koh? 2. Forecast the firm’s financial statements for 2002 and 2003. What will be the external financing requirements of the firm in those years? Can the firm repay its loan within a reasonable period? 3. What are the key driver assumptions of the firm’s future financial performance? What are the managerial implications of those key ke y drivers? That is, what aspec aspects ts of the firm’s activities should Koh focus on especially? 4. What is Star River’s weighted-average cost of capital (WACC)? What methods did you use to estimate WACC? What are the key assumptions that especially influence WACC? 5. What are the free cash flows of the packaging machine investment? investment? Should Should Koh approve approve the investment?

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