Fundamental of value in creation(finance) Investment proposal and reflection

the assignment has to be done in the spreedsheet excel as well as additional work needs to be shown and all the questions need to be completed.

SEMESTER 2, 2015

Case Study in Finance – Nova Tractor Corporation

Due by 5pm Friday 30th October (week 13) through Turnitin-
MUST include the cover page (provided on our BB website). Please note that if an assignment cover sheet is not included your assignment will not be graded.-
The assignment must be submitted:-
as one document, andØ
in one copy by the nominated group leader (if completed in a group)Ø

If you complete the assignment in a group you should:-
submit a completed and signed FBL5030 assignment contract in person (on campus students) or via email (external students) before starting your teamworkØ
submit an assignment peer review form in person (on campus students) or via email (external students) after submitting the assignmentØ

Your assignment should be in the form of business report (please refer to the document provided). Your report should include:-
a) Cover / Title page
b) An Executive Summary (word limit 300)
c) An introduction (not more than 150 words)
d) Findings and Discussion – Answers to the given questions written in the body paragraphs, with appropriate headings, subheadings, etc. This analysis should not exceed 1,200 words
e) A recommendations (not more than 200 words)
Use a word processor to prepare assignment on A4 paper. Handwritten assignments will not be accepted-
Choose a legible font face and size (e.g. Times New Roman 12 or Arial 11 would be sufficient) and double-spaced your lines-
Aim for a professional level of document presentation and formatting-
Do not include a reference list in this assignment-
Support your answers given in the body of the report with relevant Excel workings and tables placed in the appendices. You will do this by copying all Excel tables and pasting them as a picture / screenshot in your Word document. This minimises the chance of a viewing error after uploading on Turnitin-
Observe the due date strictly. Extensions can only be granted with supporting documentation (e.g. medical certificate or court summons).-

Nova Tractor Corporation owns and operates a transmission and axle plant which manufactures more than 50% of the transmissions and axles used in the complete line of tractors and harvesting equipment offered by Nova to the agricultural industry. With an extensive machining processes performed on the steel parts for the final transmission and axle assembly, a very large amount of steel shavings and bulky steel scrap is generated in this plant.

The unprocessed steel scrap is sold as a by-product of the manufacturing operation to various firms involved in the recycling process. The executive committee is currently evaluating whether to process the scrap into different grades and types of usable steel. Using different models of chip crushers, the scrap is grinded and compressed into either “rough” or “fine” scrap. The fine scrap fetches a higher market price than the rough scrap.

Nova has to decide whether to invest in the higher-cost chip crusher (HCC) to produce fine scrap or the lower-cost chip crusher (LCC) to produce rough scrap.

As a financial analyst of the company, you have gathered relevant purchase prices and operating costs of the two chip crushers from the supplier of the chip crushers and the marketing and production staff.

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