According to the FedEx 2010 Annual Report (p.49), the company's discount rate for internal usage is 12%, so that is the discount rate used in this example.
The prospect of higher inflation in the future has already been accounted for. The discount rate factors in future inflation, as does the interest rates that are used in interest rate parity. Thus, the net present value of the project already reflects expectations for future inflation in both the U.S. And in Canada. No further accounting of inflation expectations should be done. The basic figures initially presented of course do not factor in inflation, which is why I have added the discount rate and the expected future interest rates. Those are essential in accounting for the effects of inflation.
Memo:
It is recommended that FedEx Canada proceed with the Toronto expansion. The net present value of the project is $18.84 million USD. Any project with a positive NPV should proceed, and this project has a substantial NPV. Even when the...
FedEx In the case of FedEx, some elements of its business would be subject to regulatory oversight from the Department of Justice, which enforces the nation's antitrust statutes. These laws exist to protect consumers from unfair business practices. If the DoJ were to be involved in a FedEx merger this might imply that the company was attempting to merge with UPS. The result of that merger would be to take the
FedEx The organization in question is FedEx Express, the overnight courier company. The company operates a global network for picking up and distributing packages and envelopes. Most of its major fixed assets are its stations, its aircraft and its fleets of vehicles. The company's business is highly correlated with the state of the global economy, and as a result FedEx must continually adapt its capacity in different regions according to the
Local networks in Poland and in the United Kingdom have also been built up and an utter focus has been laid on Asia. By reinvesting the funds generated, the company sustains growth through acquisitions, the development of new products and the improvement of the services provided. A result of the reinvesting process is the Package Flow Technology. This is a multi-year re-engineering of their pickup and delivery of packages. It
Long-Term Financial Planning FedEx Corporation FedEx Corporation was established in 1971 and the company has four distinct business segments that include FedEx Express, FedEx Ground, FedEx Office and FedEx Freight. Over the years, the company has obtained 6-year of CAGR (compounded annual growth of 5%). However, the company is likely to obtain similar CAGR of 5.9% over the next 8 years based on current economic environment. (FedEx Corporation .2010. The WACC (weighted average
Managerial Econ FedEx is a logistics company that "provides customers and businesses worldwide with a broad portfolio of transportation, e-commerce and business services." The company offers "integrated business applications through operating companies competing collectively and managed collaboratively" (FedEx.com, 2013). The company has a number of different units, including Express, Ground, Office, Customs Critical and other smaller businesses related to its core delivery businesses. The company has experienced a long-term rising trend
However, the sum total of the organization's output extends beyond the realm of the quantifiable. Qualitative measures also exist, and they can impact on the quality of the organization's output as well. It can be argued that even qualitative outputs will eventually impact on quantitative outputs. Ford's loss of reputation as the result of the Pinto scandal, for example, cannot be quantified but the sales and profit decreases that
Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.
Get Started Now