This website uses cookies to ensure you have the best experience. Learn more

Business Manager Essay

1648 words - 7 pages


Jack Tar, CFO of Sheetbend & Halyard, Inc., opened the company confidential envelope. It contained a draft of a competitive bid for a contract to supply duffel canvas to the U.S. Navy. The cover memo from Sheetbend's CEO asked Mr. Tar to review the bid before it was submitted. The bid and its supporting documents had been prepared by Sheetbend's sales staff. It called for Sheetbend to supply 100,000 yards of duffel canvas per year for 5 years. The proposed selling
price was fixed at $30 per yard. Mr. Tar was not usually involved in sales, but this bid was
unusual in at least two respects. First, if accepted by the navy, it would commit Sheetbend to a fixed-price, long-term ...view middle of the document...

Table 9-4 shows the sales staff's forecasts of income from the navy contract. Mr. Tar reviewed this forecast and decided that its assumptions were reasonable, except that the forecast used
book, not tax, depreciation. But the forecast income statement contained no mention of
working capital. Mr. Tar thought that working capital would average about 10% of sales.
Armed with this information, Mr. Tar constructed a spreadsheet to calculate the NPV of the duffel canvas project, assuming that Sheetbend's bid would be accepted by the navy.
He had just finished debugging the spreadsheet when another confidential envelope arrived from Sheetbend's CEO. It contained a firm offer from a Maine real estate developer to purchase Sheetbend's Pleasantboro land and plant for $1.5 million in cash. should Mr. Tar recommend submitting the bid to the navy at the proposed price of $30 per yard? The discount rate for this project is 12%.

Part Two Value

Year: 1 2 3 4 5
1. Yards sold 100.00 100.00 100.00 100.00 100.00
2. Price per yard 30.00 30.00 30.00 30.00 30.00
3. Revenue (1 ?? 2) 3,000.00 3,000.00 3,000.00 3,000.00 3,000.00
4. Cost of goods sold 2,100.00 2,184.00 2,271.36 2,362.21 2,456.70
5. Operating cash flow (3 ?? 4) 900.00 816.00 728.64 637.79 543.30
6. Depreciation 250.00 250.00 250.00 250.00 250.00
7. Income (5 ?? 6) 650.00 566.00 478.64 387.79 293.30
8. Tax at 35% 227.50 198.10 167.52 135.72 102.65
9. Net income (7 ?? 8) $422.50 $367.90 $311.12 $252.07 $190.65
TABLE 9-4 Forecast income statement for the U.S. Navy duffel canvas project (dollar figures in thousands, except price per yard)
1. Yards sold and price per yard would be fixed by contract.
2. Cost of goods includes fixed cost of $300,000 per year plus variable costs of $18 per yard. Costs are expected to increase at the inflation rate of 4% per year.
3. Depreciation: A $1 million investment in machinery is depreciated straight-line over 5 years ($200,000 per year). The $500,000 cost of refurbishing the Pleasantboro plant is depreciated straight-line over 10 years ($50,000 per year).

Should Mr. Tar recommend submitting the bid to the navy at the proposed price of $30 per year? Or should Mr.Tar recommend the company pursue it's next best alternative? Please prepare a memo to Sheetbend's CEO with a recommendation providing supporting information on all aspects of your analysis.

The spreadsheet on the next page shows the cash flows associated with the project.
Rows 1 – 10 replicate the data in Table 9-4, with the exception of the substitution of MACRS depreciation for straight-line depreciation.
Row 12 (capital investment) shows the initial investment of $1.5 million in refurbishing the plant and buying the new machinery.
When the project is shut down after five years, the machinery and plant will be worthless. But they will not be fully depreciated. The tax loss on each will equal the book value since the market price of each asset is zero. Therefore, tax savings in...

Other Essays Like Business Manager

Human Resource Manager Essay

1420 words - 6 pages organizations that focus on HRM’s role? HUMAN RESOURCE MANAGER CONTEXT. Based on Guest(1987) five basic changes in the business world led the appearance of the HRM: First of all the new global markets where the competition is more fearsome and the innovation and the quality are thought to be advantages. Moreover, the economical successful countries ,such as Japan and Germany, that were focusing on the management of the personnel ,combined with

Becoming a Better Manager Essay

1117 words - 5 pages about this program? 2. What employment opportunities can come from attaining this degree? 3. Can I use what I learn in multiple areas of my life? Once I answered each of those questions for myself. I didn’t really see any reason not to enroll. Being a stay at home mom I am a manager of not only my home but of my entire family and every aspect of their life. I have learned so much about the intriguing world of business and how companies

A Servant Manager

3428 words - 14 pages decisions: “...the role of the traditional HR manager is diminishing....HR must now enter into the business of strategic HR, focus more on the bottom line of the organization, and leave the more administrative tasks to technology or others” (Mondy, 2010). Traditions are quickly fading as research discovers what traditionally worked in the past are not the best way of conducting business. HR needs to to take a more active role in shaping the

The Public Service Manager

3836 words - 16 pages Nottingham Business School Professional Certificate in Public Services Management The Public Service Manager Module 1 Assignment 1 By Mark Dooley For Kirsten Greenhalgh 30th January 2010 Word Count Part A ….2,978 Part B….700 Executive Summary This report aims to highlight my current management role and responsibilities as a Watch Manager in the Nottinghamshire Fire & Rescue Service

Delivery Manager Responsibilities

620 words - 3 pages Delivery Manager Responsibilities Oversee all engagements for Delegata The organization, administration and supervision of the people, processes, and technologies, which when combined into a comprehensive plan, provides the business and technical functions needed to successfully achieve what a client expects to receive. Review and Monitor Projects * Monitor status of projects * Budget * Schedule * Scope

Manager Productivity Exam

1131 words - 5 pages customers, and can help the productivity and performance of the business operations. In the operation of the company, there are some continuous improvements, that can be applied, but the operation in essence is the same. It could have some points in the process that can be change and/ or improve, inside a cycle of changes. 3. (20 pts.) Contrast and compare the keys to "New" management vs. the "Traditional" management techniques. Do you

Roles of a Financial Manager

819 words - 4 pages tempt the financial manager to make unethical decision in managers attempt to maximize the goals of the shareholder value. Other times companies will have a disregard of shareholders values and not only disregard reducing expenses but foster an environment where financial abuse takes place from renting luxury cars to doing business at the most expensive hotels. This behavior is important in evaluating the roles that financial managers have when

Role of the Manager Report

2323 words - 10 pages importance of achieving different targets. The main responsibilities he has as a manger consist of meeting with targets which can be sales related and also helping in driving the business forward. He claimed to spend 80 percent of his working hours during a day to work on these purposes and responsibilities. He said that he thinks his strongest quality being manager is how he is able to keep all of his staff motivated and confident, one area

What Is a Global Manager

2689 words - 11 pages Elcctrolux, Howard Gottlieh of NEC, and Wahib Zaki of Procter & Gamble vividly exemplify the specialized yet interdependent roles the three types of glohal managers play. The Business Manager: Strategist + Architect + Coordinator Global husiness or product-division managers have one overriding responsibility: to further the company's global-scale efficiency and competitiveness. This task requires not only the perspective to recognize

Selection of Sales Manager for Fortune 500

994 words - 4 pages Running head : SELECTION OF SALES MANAGER FOR A FORTUNE 500 COMPANY (TITLE OF THE PAPER ) (AUTHOR’S NAME ) (AFFILIATED INSTITUTION)  SELECTION OF SALES MANAGER FOR FORTUNE 500 KEY PLAYERS: Mr. Jake, CPA Changing to sales: As my resume states, I was an accountant but have

Be a Leader, Not Just a Manager

1439 words - 6 pages employee and manager. There’s going to be days or months at the office where mistakes are rampant, or maybe the company didn’t hit the targeted sales budget. The best thing you can do is deliver the cold-hard truths and find ways to improve yourself and your team. As I learned in Business Management this year, treat every set-back is an opportunity for a set-up to something great. So what if we missed May’s sales budget by $200,000 because we are

Related Papers

Role Of A Manager Within The Functional Areas Of Business

1263 words - 6 pages Role of a Manager Within the Functional Areas of Business The manager’s role is crucial in all business. The manager is one of the most important pieces in the business, because he is the one that has to identify problems or successes in the business and be able to respond to them with effectiveness, he has to have precise knowledge of the different departments of the company. In my presentation, I will discuss the various departments

The Role Of The Manager Within The Functional Areas Of Business

839 words - 4 pages , operations management, marketing, and strategic planning. If a company did have these functions working collectively the company would not be in business. Each department has its own relevant goal to ensure the establishment’s success. The manager that is behind the scenes of each function is more relevant than the function itself, as the manager has to make sure their role is successful within the company. As we exemplify the functional areas, let’s

You Are The International Manager Of A Us Business That Has Just Developed A Revolutionary New Personal Computer That Can Perform The Same Functions As Existing Pcs But Costs Only Half As Much To...

1678 words - 7 pages &P Company in relation to licences, resource availability, environmental issues, outsourcing, etc. ISSUES OF YJ YJ, an oil/gas exploration and production company, has applied for 4 licenses which are necessary for the business to carry on its operations. Three out of four were won by YJ and got the right to test drill on three different fields (EEE, FFF and GGG). But the concerned issue here is within two weeks, the firm has to give its

Product Manager Essay

2168 words - 9 pages offered by the competition, and how well the product fits with the company's business model. Generally, a product manager manages one or more tangible products. However, the term may be used to describe a person who manages intangible products, such as music, information, and services. The product manager title is often used in many ways to describe different duties and responsibilities. This is due to tradition and intuitive interpretations by