Blue Ridge Mill

depressed ridge Mill was considering a young supplement to the on-site Long timber wood-yard. There would be 2 primary benefits spring pull up stakes be to eliminate the need to purchase briefly-circuit-wood from an foreign supplier and second to gain an new business luck to dish out short wood on the blunt market. So the new wood yard would reduce the operating deliver and append the receiptss. The new wood-yard will possess new apply science to which will allow them to produce tree-length logs called long-wood on-site and they would be capable to compete with the Shenandoah Mill in the short-wood market. Bob the ascendancy at the Blue ridge mill needed to feel if the 18 million investiture in expanding the company was worth(predicate) it. In send to call in if it was worth, first we coif together the relevant cash-flows. And it starts with 16million in detonating device in 2007 . The predicament: Bob Prescott want to know if an enthronement of 18m illion (BIG ONES) on an on-site long wood wood-yard and new equipment would be worth the risk. Prescott realizes that on that point are some benefits in adding in the wood-yard. First they would no longer need to purchase short wood from their adversary The Shenandoah Mill. The next benefit was creating a new opportunity to sell short wood on the open market and be able to level the competition surrounded by The Shenandoah Mill.

These benefits will help to lower the operating cost and mount revenues for the Blue Ridge Mill. If he decides to go through with the elaboration the verbalism would start within a few months and would bring aside to pay th! e 18million in two twelvemonths the first year 2007 he would have to drop 16million and the other 2million in 2008. The blowup would create an estimated savings on operations of 2million in 2008 and 3.5 million in the rest on the years. With the opportunity to sell short wood on the open market Prescott estimated revenues of 4million in 2008 and increase to 10million public treasury 2013. He estimated that the COGS would be 75% of sales revenue and the SG&A expense...If you want to get a full essay, order it on our website: BestEssayCheap.com

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