Guillermo Furniture Store Cash Analysis

Running Head: GUILLERMO FURNITURE STORE CASH fertilize ANALYSIS Guillermo Furniture Store Cash Flow Analysis FIN 571 Guillermos Furniture Store Analysis Guillermos furniture manufacturing confederacy is laid in Sonora, Mexico in a beautiful vacation spot. The company is the largest furniture manufacturing company in the argona and has made furniture for many years, business was doing well until late in the nineties when new ambition came and joined the furniture making business. The competition had the newest technology available allowing them to come in with lower prices to the customers. Therefore, Guillermo mustiness now decide on turn updo option for the company, whether to climb and move forward or pass over pissing as he has for years and give the customer the quality convergence they expect. With new competition and a weak economy Guillermo could be faced with becoming a distributor of furniture rather of being a manufacturer. In browse for Guillermo to determine the best way for the company to move forward Guillermo must set-back look at alternatives for financial decisions and determine which alternative would work best for the company and Guillermo must also work out a pro forma cash flow budget for the near five years for the organization to analyze the companies projected scratch (UOP, 2009).

Alternatives Guillermo has been evaluating 3 alternatives. The first alternative is to remain with the status quo and continue to operate his business as he has been doing all along. The pelf Present Value (NPV) analysis run by an outback(a) consultant found that the current situation Guillermo is operating is the highest of the tierce alternatives at $574,538 but the net income after taxes is the lowest of the three alternatives at $24,694.The NPV is higher because no additional capital purchases are needed to go with this alternative. Guillermo already owns the building and there would non be any other initial capital constitute with this option (UOP, 2009). The second... If you want to get a full essay, order it on our website: Orderessay

If you want to get a full essay, wisit our page: write my essay .