The Big Cheese of Mousetraps

In: Business and Management

Submitted By ihsan
Words 4009
Pages 17
Chapter 6

TIME VALUE OF MONEY

Alex Tajirian

Time Value of Money

6-2

1. OBJECTIVE
# Derive a valuation (pricing) equation based on cash flow (amount, timing, & risk). Time Value of Money analysis involves: ! ! What is $1 worth 10 years from today (Future Value)? What is $1 to be received in 10 years worth today (Present Value)?

#

#

Applications ! ! ! ! ! ! ! Loan amortization stated vs. effective interest charged rebate vs. low financing pricing of bonds (Chapter 7) pricing of stocks/firms (Chapter 7) What is the value of a particular division within a firm? How much value does a new project contribute to a firm?

#

In this chapter we assume the following are given: ! cash flow: amount, timing, and risk as reflected in k

© morevalue.com, 1997
Alex Tajirian

Time Value of Money

6-3

2. TYPES OF VALUATION

L

Based on investors' preferences and attitudes towards consumption and risk. ! Demand & Supply analysis

L

Based on "cash flow (CF)", ! CF: stream of promised future income

today = time of analysis | period s CF $100 200 -100 ... 0 | 1 | | 2 time 3

where periods can be hours, days, weeks, etc Note.

7

Positive CF means receiving $ (inflow), negative CF means paying $ (outflow)

Thus, given the CFs and how good the promise is, its risk, everyone would agree on the value (price) of the income stream.

© morevalue.com, 1997
Alex Tajirian

Time Value of Money

6-4

3. FUTURE VALUE (FV)

L

Put $100 (CF) in a bank for one year at interest (i) = 10% What is value of $100 one year from today; (FV1) ?

FV1 ' ' ' ' '

Future Value of a CF 1 period from today principal % interest payment principal % (interest rate) × (principal) $100 % (.1)($100) $100 × (1 % .1) ' $110

(1)

where, subscript 1 denotes # of periods in the future Thus, the CF is compounded at rate "i".

L

What is value…...

Similar Documents

Cheese

...Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese Cheese......

Words: 360 - Pages: 2

Cheese

...Cheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese manCheese......

Words: 553 - Pages: 3

Trap-Ease the Big Cheese of Mousetraps

...Trap-Ease the Big Cheese of Mousetraps Martha and the Trap-Ease investors believe they face a once in a lifetime opportunity. What information do they need to evaluate this opportunity? How do you think the group would write its mission statement? How would you write it? First of all there are four primary areas for assessment that should be considered. 1. People Behind the idea: the background, talents, and experience of the personnel behind the idea and the management team, employees, and advisers. 2. Resources available: 3. The knowledge and information possessed by the entrepreneur, including knowledge of the new concept, the industry, and market research. Moreover they shall consider barriers to entry, location, competitors, social and economic trends, regulatory factors, target market, and market penetration and more importantly how information would be obtained? 4. The idea’s ability to generate revenue. How great is the potential to sell something that will generate actual revenues? There are a lot of tools that can be used to evaluate the initial idea and subsequent opportunities. • Creative tools such as ALUO (Advantages, Limitations, Uniqueness, and Opportunity) can help entrepreneurs identify the key strategic points and differences surrounding their ideas for the business. • The KIC (Knowledge of Industry Checklist), including a comprehensive competitor analysis, is a useful guide for collecting and interpreting information about the industry. • “Give Me......

Words: 2713 - Pages: 11

Trap-Ease America: the Big Cheese of Mousetraps

...Case Analysis Case: Trap-Ease America: The Big Cheese of Mousetraps Product: Variety, quality, design, features, brand, packing, services, warranties, returns. Price: List price, discounts, allowances, payment period, credit terms. Promotion: Sales promotion, advertising, sales force, public relations, and direct marketing. Place: Channels, coverage, assortments, locations, inventory, transport. Strategic Marketing Choose de value: STP: Segmentation, Targeting, and Positioning. The marketing staff must segment the market, select the appropriate market target, and develop the offering’s value positioning. Tactical Marketing Provide the value: Product development, service development, pricing, sourcing making, distributing. Communicate the value: Sales force, sales promotion, and advertising. Strategy Formulation: Overall cost leadership, differentiation, and focus. 1) Diagnose Advantages: Consumers can use safely and easily with no risk, and it poised no injury or poising. Target Market: Women Distribution: Direct through national grocery, hardware, and drug chains (Safeway, Kmart…). Pricing: $0.99 – Suggested Retail Price $2.49 (2 unit) – Cost $0.392 – Retail net revenue $0.75. Price Positioning: 5 to 10 times more expensive Sales expenses: $60,000 ($50K for travel, and sales calls - $10K advertising). Advertising: Good Housekeeping Magazine. Sales Forecast: 5 millions of units - Current Sales: Several hundred thousand. Budget: $250,000 for......

Words: 820 - Pages: 4

Big Mac. Big Mess

...Big Mac Meal, Big Mess Jordan Jasnoch, Devyn Kennedy, Ashley Hoffer, Cheyenne Hanson The large, glowing “M” in the distance beckons me forward as I head into McDonalds, a strange land of food that smells of oil, grease, sweat, and meat. The clambering of people all around me blurs into one indistinguishable chorus of noise. I ignore this as I sit down in a cold, leathery cushion to enjoy my meal. I start as always with the Big Mac, a dripping monster that is barely kept together by the buns that house the contents. The sight strikes me as odd as it is nothing like was advertised, but instead is pathetic, wet, and seems to be like that of a sad old man awaiting death. With the first bite I notice immediately an explosion of flavors that offend me to no end, such as the bitter “secret sauce.” Towers of pickles add to this bitterness, while processed meat so horrid that it could only have come from a clinically depressed cow puts on a parade of disgust and disappointment in my mouth. Within moments, the nauseating smell of said “secret sauce” fills my nostrils. The world’s largest fast food chain hasn’t kept this sauce much of a secret. Consumers can easily find that it is made of straightforward ingredients such as store bought mayonnaise, pickle relish, onion powder, yellow mustard, white vinegar, garlic powder, and paprika. Certainly not the palate of kings, this repulsive sauce has the consistency of dog vomit and I am rather sickened as the vile substance drips down......

Words: 752 - Pages: 4

Cheese

...Cheese is a food derived from milk that is produced in a wide range of flavors, textures, and forms by coagulation of the milk protein casein. It comprises proteins and fat from milk, usually the milk of cows, buffalo, goats, or sheep. During production, the milk is usually acidified, and adding the enzyme rennet causes coagulation. The solids are separated and pressed into final form.[1] Some cheeses have molds on the rind or throughout. Most cheeses melt at cooking temperature. Hundreds of types of cheese from various countries are produced. Their styles, textures and flavors depend on the origin of the milk (including the animal's diet), whether they have been pasteurized, the butterfat content, the bacteria and mold, the processing, and aging. Herbs, spices, or wood smoke may be used as flavoring agents. The yellow to red color of many cheeses, such as Red Leicester, is produced by adding annatto. For a few cheeses, the milk is curdled by adding acids such as vinegar or lemon juice. Most cheeses are acidified to a lesser degree by bacteria, which turn milk sugars into lactic acid, then the addition of rennet completes the curdling. Vegetarian alternatives to rennet are available; most are produced by fermentation of the fungus Mucor miehei, but others have been extracted from various species of the Cynara thistle family. Cheese is valued for its portability, long life, and high content of fat, protein, calcium, and phosphorus. Cheese is more compact and has a longer......

Words: 414 - Pages: 2

Cheese

...cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheesecheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheesecheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheesecheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheesecheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheesecheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheesecheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheesecheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese cheese......

Words: 347 - Pages: 2

Cheese

...In a matter of weeks, my entire life is going to be flipped upside down. I have enrolled myself in to a very treacherous and horrible class that goes by the simple code of COMM 1320. Public Speaking. Speeches, talking, being sociable, are simply not my things. I become fearful, tense, and nervous when I have to stand in front of an audience and give some type of presentation. For now, I have time, time to devote myself to becoming better, and get out of this closet of being scared. The character of Who Moved My Cheese? that I am most like would definitely have to be Hem and moving beyond fear. I have never been a big fan of talking in front of people. Whether it be explaining a small topic to a group of five or six people, or informing a class of about thirty people about a certain topic, I have never had the confidence to move past my fears and learn to become a good speaker. When it comes to any type of public conversation, my body instantly tightens up and I lose every train of thought in my head due to a lack of composure and mental stability. The smallest type of conversation can make me freeze up and cause me to become speechless. Any encounter with a stranger is definitely a good example. I usually stick with basics if I open the door for somebody or just greeting somebody, and I say “thank you,” or “hello.” Learning to somehow get over this would be not only beneficial to me, but to everybody that I associate myself with. Being like Hem is definitely not something...

Words: 571 - Pages: 3

Trap-Case Mousetrap

...Martha tries to target her customers, women, only through magazines, knowing that most women read magazine and somehow they will see and read about Trap-Ease America mousetrap. But I think that Martha should have marketed this products within a broader demographic area. For instance, docks should be also targeted; because in shipping there are usually problems with mice and rats. Moreover, docks will buy traps in large amounts, which will undoubtedly improve the company sales. Also grocery stores is good place of targeting women because most of the time the women are the ones running errant. Positioning: Improve Trap-Ease's positioning statement. Write a new, more compelling positioning statement for the company. We can see that Trap-Ease America’s positioning is “trap mice easily”. I think this position is somehow too broad and thus it is not too catchy. If I were part of the group, I would suggest “Trap mice and leave your hands clean” or “trap mice and leave no mess behind”. Marketing Strategy: How would you change Trap-Ease marketing strategy? What controls (i.e. means of monitoring) would you establish for this strategy? I can see that Trap-Ease America is facing marketing myopia and its marketing strategy is more product-oriented than it is customer-oriented. Trap-Ease group seems to create the mousetrap for their own pleasure without really focusing on satisfying their customer needs and wants. Moreover, I think Martha cares more about selling a number of units......

Words: 568 - Pages: 3

Cheese

...Research Project Cheese Origins, history and where it is now found in the world In the ancient eras, during the Greeks and Romans’ time, cheese was an important trade product and was mentioned extensively in the literature of the day (including in Homer’s odyssey, whereby Cyclops Polyphemus’s cave have description on cheese’s production). In the first century AD, The Roman writer Apicius states the steps in cheese production when writing. The Roman word for cheese is caseus, which is derived from the word casein, which means milk protein that is curdled to make cheese. The French word for cheese fromage and Italian is formaggio and Italian word, which come from the Greek word formos which stands for form or mould. Essentially, cheese is produce by curdling fermented milk then removing the liquid that forms which is known as the whey. The curds are generally curdled using rennet; a substance extracted from the stomach of animals such as cows, and salt is used to flavor it. It was unclear when exactly rennet was first used, but there is assumption that it was by the Etruscans, during the fifth and sixth century BC. The Romans were the ones who pioneered the method of cooking curds in cheese making, allowing for longer shelf life, enabling harder cheese to be trade and transport conveniently. The combination of bacteria used to ferment the milk, in combination with kind of milk and particular type of cheese-making method used, plus the action of time as cheese is......

Words: 3347 - Pages: 14

Trap-Ease America: the Biggest Cheese of Mousetraps

...3812557 Taina Carvalho M. Luciano GDBA 504/2 A: Marketing Thursday, September 25th, 2014 Assignment 1 Presented to: David Moscovitz TRAP-EASE AMERICA: THE BIG CHEESE OF MOUSETRAPS 1. Martha and the Trap-Ease America investors believe they face an once-in-a-lifetime opportunity. What information do they need to evaluate this opportunity? How do you think the group would write its mission statement? How would you write it? In order to make the best out of this opportunity Martha and Trap-Ease America organization need to understand strengths and weakness of the company and the opportunities and threats of the market they are introducing themselves to, the size of that market and competitors, applicable marketing channels, specially the distribution channel, therefore their transportation methods and logistics, manufacturing costs, and required return on investment and profit. They also “need to understand customers needs better than competitors do and deliver more customer value“ to gain competitive advantage. According to the information on our textbook, Trap-Ease America focus essentially on their product and not much on the costumer, thus their mission statement would be something close to “The greatest innovation in mouse trap”. In my opinion they should focus more on the costumer and what they believe they are looking for as well as on the features of the product, such as “We provide hygienic, eco-friendly and safe solution to your rodent...

Words: 1136 - Pages: 5

Cheese

...before bed. Late night eating contributes to childhood obesity in the fact that there is not enough time and they do not do enough activities before bed to burn off calories and fat and when they go to bed that all sinks into them and in becomes a lot easier for them to gain fat. Children are ten times more likely to be obese if both parents are obese. It isn’t always the family habits causing the children to be obese, but they can have a direct impact on the problem. (www.sparkpe.org/blog/how-has-the-childhood-obesity-rate-changed/) This paper was to inform people how dangerous childhood obesity and how serious of a problem it is. Obesity is gaining in number everyday and it is becoming socially accepted people aren’t making a big deal of people obese when it is becoming one of the biggest killers in the united states. I also focused on the three main causes that cause childhood obesity and I talked about these things so people can start helping reduce this huge problem we have in America. These things have to be slowed down or stopped childhood obesity needs to start being taken very serious and everyone affected by it needs to step in and help out, it is getting so out of hand that this generations life excspencey is started to decrease because this generations children are starting to get so many diseases and health problems. This issue is very dear to me because my friend is only 18 and already has sleep apnea, which is a sleeping problem, which a main......

Words: 1626 - Pages: 7

Mr Cheese

...Mr cheese is the best Mr cheese is the best Mr cheese is the best Mr cheese is the best Mr cheese is the best Mr cheese is the best Mr cheese is the best Mr cheese is the best Mr cheese is the best Mr cheese is the best Mr cheese is the best Mr cheese is the best Mr cheese is the best Mr cheese is the best Mr cheese is the best Mr cheese is the best Mr cheese is the best Mr cheese is the best Mr cheese is the best Mr cheese is the best Mr cheese is the best Mr cheese is the best Mr cheese is the best Mr cheese is the best Mr cheese is the best Mr cheese is the best Mr cheese is the best Mr cheese is the best Mr cheese is the best Mr cheese is the best Mr cheese is the best Mr cheese is the best Mr cheese is the best Mr cheese is the best Mr cheese is the best Mr cheese is the best Mr cheese is the best Mr cheese is the best Mr cheese is the best Mr cheese is the best Mr cheese is the best Mr cheese is the best Mr cheese is the best Mr cheese is the best Mr cheese is the best Mr cheese is the best Mr cheese is the best Mr cheese is the best Mr cheese is the best Mr cheese is the best Mr cheese is the best Mr cheese is the best Mr cheese is the best Mr cheese is the best Mr cheese is the best Mr cheese is the best Mr cheese is the best Mr cheese is the best Mr cheese is the best Mr cheese is the best Mr cheese is the best Mr cheese is the best Mr cheese is the best Mr cheese is the best Mr cheese is the best Mr......

Words: 1900 - Pages: 8

Cheese in Vietnam

...CHEESE IN VIETNAM Euromonitor International October 2015 CHEESE IN VIETNAM Passport LIST OF CONTENTS AND TABLES Headlines ..................................................................................................................................... 1 Trends .......................................................................................................................................... 1 Competitive Landscape ................................................................................................................ 1 Prospects ..................................................................................................................................... 2 Category Data .............................................................................................................................. 3 Table 1 Table 2 Table 3 Table 4 Table 5 Table 6 Table 7 Table 8 Table 9 Table 10 Table 11 Table 12 Table 13 Sales of Cheese by Category: Volume 2010-2015 ...................................... 3 Sales of Cheese by Category: Value 2010-2015 ......................................... 3 Sales of Cheese by Category: % Volume Growth 2010-2015 ...................... 3 Sales of Cheese by Category: % Value Growth 2010-2015 ......................... 4 Sales of Spreadable Processed Cheese by Type: % Value Breakdown 2010-2015 ................................................................................. 4 Sales of Unprocessed Cheese by Type: % Value Breakdown......

Words: 3262 - Pages: 14

Cheese

...Cheese I am definably a cheese lover. There are over 600 different kinds of cheese so you can’t get bored from eating cheese. My favorite dishes with cheese are pizza, any kind of Mexican dishes, macaroni and cheese, grill cheese sandwich, process cheese (just unwrap and eat), chucks of cheese for snacks, different pastas with cheese and of course the cheese burger. I love going to the Mexican restaurant and ordering cheese dip, it hot and you dip your chip into the bowl of cheese and it just makes everyone eating feel good. Conversation starts and everyone is laughing and dripping away at the cheese bowl. Americans typically use less than six different types of cheese in their kitchen: cheddar, Swiss, parmesan, mozzarella, Colby, and maybe blue. Cheese lovers should not limit themselves to the status quo; there are hundreds of types of French cheese alone, not to mention Italy, Spain, or America cheeses. Basic types of cheese are categorized as fresh (short shelf-life), soft or semi-soft cheeses (completely edible), blue/bleu (falls into every catalog but fresh), washed-rind (“Stinky” cheese), hard (firm to truly hard), uncooked pressed (“cheddaring” to prolong the shelf like), and cooked pressed (Hard cheese types must be aged for longer). All cheese is made from the milk of cows, goats or sheep. The process to make cheese can last from two weeks to years depending on the cheese that is being made. I want get into how cheese is made because frankly it is a......

Words: 654 - Pages: 3

Product life cycle | Mathématiques en économie-gestion | Suits S07E10 Donna 1080p NF WEBRip DD5.1 x264-NTb MKV