Star River Electronics Ltd.

STATEMENT OF THE PROBLEM Star River Electronics Ltd. is a large manufacturer 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 succeeder in the past decade, imputable in large tell to their excellent reputation. Star River does need to talking to several issues with the recent resignation of their former CEO. Digital exposure Disks are judge to cut into the CD-ROM market in the very climb future, and with only 5% of their gross sales approaching from this area, Star River call for capital expenditures to increase their capacity in this sector. To finance this expenditure, they washbasin use either debt or equity. Also, a juvenile publicity machine which would cut down on labor and smash-up 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 delay the proje cted growth rates. Finally, a weighted average follow of capital needs to be estimated for the firm, which depart help to tell this question of whether to wait or buy this equipment at the feed 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 will cost SGD54.6 million o         The new equipment cost will be paying throughout the next cardinal years. o         The new equipment will be depreciated over septenary years. o         Assume that funding for the new equipment will be through debt         Interest expense is weighted for short-term debt and long-term debt: 6.53%         The new p! ackaging machine will cost SGD1.82 million. This subject 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 nurture a full essay, order it on our website: OrderCustomPaper.com

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