Discuss some of the difficulties your team had in using the constant growth model.

Analysis of the company value proposition, market position, and competitive advantage.
July 23, 2020
Describe the company in terms of industry, size, number of employees, and history.
July 23, 2020

Discuss some of the difficulties your team had in using the constant growth model.

0) Choose any publicly traded common stock that pays a dividend. There are many sources for this information (Two areand).2)(50) You need to examine an asset replacement decision for Bay Lin. Bay Lin Businesses is in the mining industry. They are considering replacing an old processing system with a new one. The planning horizon is 3 years. Jim Lee is reviewing the information on the old system. The old processing system currently generates $28 million in sales each year for 3 years. The cost of goods sold is 80% of sales. Fixed costs are $2 million per year for 3 years. The old equipment is fully depreciated, but can be sold today for $1,000,000.The new system requires a new machine. It will cost $18,000,000 to be depreciated on a straight-line basis to a zero book value over 3 years. The new machine has a salvage value of $6,000,000 at the end of the 3 years. Because of the improved quality and quantity of the mined goods, sales will increase to 40 million per year for 3 years. Production efficiencies will reduce cost of goods sold to 55% of sales. Gem Lee estimates fixed costs of $2,500,000 per year to cover additional promotion and advertising of the new process. The new process will require working capital. The total investment in net working capital is $2,000,000 at time 0; 3 million at time 1; 1 million at time 2 and 0 at time 3 (Note here that the total is given rather than the change). All operations will cease at the end of year 3. The tax rate is 40%.For either Bay Lin or the asset replacement of your choice, answer the following questions: