Blue Ridge Mill

fat extend lollygag was considering a young do-gooder to the on-the-scene(prenominal) Long woodland wood- thou. There would be 2 primary benefits inception impart be to separate the need to secure briefly-circuit-wood from an impertinent supplier and second to pee an refreshed business fortune to plow short wood on the blunt securities industry. So the new wood yard would reduce the direct reward and append the receiptss. The new wood-yard ordain possess new employ science to which will deliver them to produce tree-length logs omened long-wood on-site and they would be capable to compete with the Shenandoah drudgery in the short-wood market. Bob the accountant at the Blue ridge mill needed to last if the 18 million investment funds in expanding the company was worthy it. In send to call in if it was worth, first we edit together the relevant cash-flows. And it starts with 16million in detonating device in 2007 . The predicament: Bob Prescott want to last if an enthronement of 18million (BIG ONES) on an on-site long wood wood-yard and new equipment would be worth the risk. Prescott realizes that on that point are some benefits in adding in the wood-yard. First they would no longer need to purchase short wood from their contender The Shenandoah Mill. The next benefit was creating a new probability to sell short wood on the open market and be able to level the ambition surrounded by The Shenandoah Mill.

These benefits will help to lower the operating cost and mount revenues for the Blue Ridge Mill. If he decides to go through with the elaboration the social system would start within a few months and would bring frontwards to pay the 18million in dickens twelvemonths the first year 2007 he would have to drop 16million and the new(prenominal) 2million in 2008. The blowup would create an estimated savings on trading operations of 2million in 2008 and 3.5 million in the rest on the years. With the opportunity to sell short wood on the open market Prescott estimated revenues of 4million in 2008 and increase to 10million till 2013. He estimated that the COGS would be 75% of sales revenue and the SG&A expense...If you want to get a full essay, order it on our website: Orderessay

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