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Alliance Concrete Case Questions

Alliance Concrete must make decisions regarding its 2006 financial statements including whether to make a $3 million dividend payment to National, repay principal to its bank, or make capital investments. The summary should project 2006 financial statements assuming the dividend is paid, and analyze the effects of alternative choices on borrowing. It must also recommend whether to repay the bank, invest capital, or pay the dividend, justifying the decision. The summary should discuss approaches and arguments that could be made to the bank or National depending on the choice.

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2K views1 page

Alliance Concrete Case Questions

Alliance Concrete must make decisions regarding its 2006 financial statements including whether to make a $3 million dividend payment to National, repay principal to its bank, or make capital investments. The summary should project 2006 financial statements assuming the dividend is paid, and analyze the effects of alternative choices on borrowing. It must also recommend whether to repay the bank, invest capital, or pay the dividend, justifying the decision. The summary should discuss approaches and arguments that could be made to the bank or National depending on the choice.

Uploaded by

S r k
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Alliance Concrete Case Questions

Prepare a written report (2 to 3 pages) on this case. Please ensure you answer the following questions in your report. Note that question 1 requires you to do a financial projection of Alliance Concretes 2006 financial statements (using Excel). Teams/Individuals will be selected at random to lead the class discussion on the case and present their 2006 financial projections. 1. What is your best estimate of the 2006 financial statements? As a starting point, assume that Alliance makes the expected $3 million dividend payment to National. Hence, the balance sheet will be balanced by adjusting the amount of the bank loan. This implies a possible renegotiation with the bank. Once the forecast is completed, consider the effects on the borrowing amount from changing the dividend or capital expenditure choices. 2. Alliance must choose between a. making the principal repayment to the bank, b. making capital investments, and c. making the dividend payment to National. What is your recommendation, and what is your justification? 3. Assume you chose to renegotiate with the bank how would you approach the bank, and what arguments would you put forward? Your arguments should include what you have learned so far in this course! 4. Assume you chose to skip the dividend how would you approach National, and what arguments would you put forward? Your arguments should include what you have learned so far in this course!

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