Options such as the automation technology that provide strong positive cash flows in the near-term are inherently attractive, but the full range of NPV analysis will indicate whether such a decision is best for the company in the long run. In this case, the best decision in the short run is also the best one in the long run. Guillermo will naturally want to undertake a sensitivity analysis in order to confirm the findings of his NPV and IRR calculations. At this point, Guillermo will want to subject his assumptions to testing and will also want to focus on ensuring that the strategy is implemented in a way that allows the cash flow projections to prove accurate.
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By focusing measurement on cycle time, productivity, quality and profitability, Guillermo will have better information that can help guide his decision-making with respect to the different strategic choices with which he is faced. If he chooses to continue making furniture, he will be better equipped to improve his processes in the future as this information forms the basis of a much stronger control system than is currently utilized at Guillermo. Break-Even
Guillermo Furniture Store is facing a difficult operating environment. The cost of labor -- a key input -- is increasing rapidly. The company is facing intense competition from a foreign competitor that has the ability to undercut Guillermo's low-end lines with better-quality goods. In order to save his business, Guillermo has sought out three different alternatives and is subjecting these alternatives to financial analysis. The results of the financial analysis
Guillermo Finance A Practical Application of Basic Concepts in Finance: The Guillermo Furniture Case Study In any situation that a business might face, there are many different perspectives that can be brought to bear on the issue in order to help develop an effective and well-reasoned decisions. Analysis of internal strengths and weaknesses as well as external opportunities and threats -- a standard SWOT analysis -- is one largely qualitative way of
Guillermo Corporate Finance Examining Guillermo Furniture: The Principles of Corporate Finance Guillermo Furniture, a furniture manufacturer, wholesaler, and retailer located in Sonora, Mexico is faced with a choice. The company is facing increasing competition from overseas competitors that employ newer technologies in the manufacturing process that allow them to reduce labor costs without significantly sacrificing the quality of their products. With a rather substantial initial investment, Guillermo Furniture can purchase the equipment
Guillermo Furniture and its owner are at a difficult crossroads, and the best financial course for both in the coming years is not immediately clear. Though the hand-made furniture business has been doing well, increasing automation in other companies and the rising cost of labor in the Sonora region where the company operates is making it difficult for Guillermo Furniture to compete, and its situation will only become more untenable
Gullermo Guillermo Furniture Store Analysis Situation Overview Guillermo's furniture manufacturing company is located in Sonora, Mexico which was formerly a quiet vacation spot but has undergone a significant amount of development including an international airport. The organization is the largest furniture manufacturing company in this area and has been manufacturing furniture for some time now. Although the company was profitable until the late 1990's, the industry began to change. The competition was composed
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