Assignment 3

Step 7#

We as know Scania is a Truck seller company that have The best engines and strong. Each type of truck have different look and engines ( horse power ).In this step I choose the most popular In the market , 3 different type of Scania truck

Pictures ID price

2009 Scania R480 $79,400

2014 Scania R560LA $148,500

2014 Scania R730 $169,800

Step 8#

Ratio is the thing that very hard foe me, I tried so hard to get it done and understand about it; but lucky I have friend to help me on it.

Scania net profit got down very low to 4.3% in 2016 but increased in 2017 up to 6.4%. Return on assets on 2014 set on 3.5% and increased 0.5% on 2015 to 4.0% but % going down very low on 2016 to 2.8% and increased to 4.3% on 2017. For profitability ratio of Scania is very on stable. The current asset ratio is not to bad on beginning 2014 but Scania keep pushing up to raised again on 2017. The price earning for Scaina is not to bad since 2014 to 2017.

Economic profit

I used 10% as my WACC for calculating the economic profit because I couldn’t find the cost in annual report. The return on net operating asset NOA is very low on 2014 an 2015 but got increased in 2016 bit however in 2017 go all the way down again.

Step 9#

OPTION A: New trucks from high quality equipment

OPTION B: workshop services

OPTION A OPTION BOriginal Cost -20m -50mEstimated Useful Life 10 years 10 yearsResidual Value 0 -1.5mEstimated Future Cash Flows31 December 2020 (time period = 1 year) -3m -5m31 December 2021 (time period = 2 years) 4m -2m31 December 2022 (time period = 3 years) 5m 4m31 December 2023 (time period = 4 years) 5m 6m31 December 2024 (time period = 5 years) 4m 10m31 December 2025 (time period = 6 year) 10m 15m31 December 2026 (time period = 7 years) 7m 7m31 December 2027 (time period = 8 years) 5m 9m31 December 2028 (time period = 9 years) 9m 20m31 December 2029 (time period = 10 years) 6m 17m

After calculating the NPV, IRR and payback period, I have decided I will go for option A. option A has the higher NPV and IRR and payback period is 5 years and 6 months while option b has negative NPV, low IRR and payback period is after 7 years and 3.6months.

PEER FEEDBACK SHEET: ASS#2 (Steps 7-10)

Feedback From: Suphakit

Feedback To: Sarah .

My Comments

Step 7

Identify three products or services of your firm

Estimate selling price, variable cost & CM

Commentary – contribution margins

Constraints – identify & commentary

your Identify three products or services of your firm

Estimate selling price is very nice and clear.

Step 8 Calculation of Ratios ,Calculate economic profit. your company is look very difficult to find but you did very good job on it.

Calculation of ratios

Ratios – commentary (blog)

Calculate economic profit

Commentary – drivers of economic profit (blog)

Step 9 your Develop capital investment decision for your firm is look nice and clear on it, very easy to compare with other.

Develop capital investment decision for your firm

Calculation of payback period, NPV & IRR

Recommendation & discussion

Step 10 Thank for giving me feedback

Individual feedback with other students

Overall ASS#3

PEER FEEDBACK SHEET: ASS#2 (Steps 7-10)

Feedback From:

Feedback To: .

My Comments

Step 7

Identify three products or services of your firm

Estimate selling price, variable cost & CM

Commentary – contribution margins

Constraints – identify & commentary

Step 8

Calculation of ratios

Ratios – commentary (blog)

Calculate economic profit

Commentary – drivers of economic profit (blog)

Step 9

Develop capital investment decision for your firm

Calculation of payback period, NPV & IRR

Recommendation & discussion

Step 10

Individual feedback with other students

Overall ASS#3