Euroland

In: Business and Management

Submitted By major
Words 1374
Pages 6
Executive Summary :
Euroland foods is a stable name in the market , it has grown well in the market over the years , but now it is planning to allocate the budget for the newly planned activities which are costing it more than 300 Million
Euros but the company has to invest only 120 Million Euros . Various people from the upper management have come up with their suggestions for investment , few of them are very good and are acceptable in just a blink of the eye but many of them require greater search and evaluation for their validity . It is suggestible to first evaluate the alternatives and then rank them so that best of the activities could take place within the allocated budget .
Strengths Weaknesses :
In replacement and expansion of the truck fleet , the company can increase the number of goods hauled on the truck and this could reduce the transportation costs in the long run , further it could possibly have a greater market coverage but it is very costly to go for this option as
Klink is not doing any experiment and going directly for 100 new trucks .
The Internal Rate of Return 7 .8 percent is comparatively low to the minimum set for the company which is 8 percent . For an investment of 30 million and a projected gain of 11 .6 million in the next seven years is rather low as compared to what other projects can bring .
The acquisition of new plant is although a good option but yet it is not very useful option as the investment in the entire plant can be risky and can put a lot of burden on the entire company 's budget , it is suggested that the company should buy a warehouse to support the growing needs of the customers for ice cream and yogurt . Another problem would be related to the labor hiring which would result in more costs . The
Internal Rate of Return of 11 .3 percent is higher than the minimum value…...

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