財(cái)務(wù)管理案例（LAURENTIANBAKERIES）（英文版）

1、PAGE 1PAGE 14辦LAURENT瓣IAN BAK奧ERIES案The dec捌ision-m拌aker mu板st make哎 a reco霸mmendat敖ion on 叭a large盎 expans岸ion pro埃ject. D艾iscount把ed cash愛(ài) flow a哎nalysis拔 is req巴uired.背In late百 May, 1罷995, Da耙nielle 八Knowles壩, vice-般preside暗nt of o懊peratio罷ns for 辦Laurent芭ian Bak哎eries I鞍nc., wa奧s prepa辦ring a 癌c

2、apital瓣 expend暗iture p胺roposal哎 to exp爸and the罷 compan半ys fro懊zen piz般za plan按t in Wi般nnipeg 稗Manitob奧a. If t疤he oppo癌rtunity吧 to exp八and int扮o the U敗.S. fro佰zen piz邦za mark疤et was 襖taken, 斑the com板pany wo啊uld nee扳d extra拔 capaci翱ty. A d拌etailed按 analys皚is, inc盎luding 哎a net p藹resent 吧value c背alcula

3、t罷ion, wa版s requi捌red by 傲the com靶panys 皚Capital挨 Alloca耙tion Po藹licy fo懊r all c叭apital 八expendi般tures i絆n order澳 to ens笆ure tha案t proje愛(ài)cts wer哎e both 稗profita岸ble and百 consis疤tent wi矮th corp凹o(jì)rate s埃trategi半es.傲COMPANY捌 BACKGR藹OUHD扳Establi安shed in扒 1984, 熬Laurent罷ian Bak鞍eries I壩nc. (La巴urentia捌n)

4、 manu岸facture邦d a var敖iety of俺 frozen搬 baked 拌food pr敖oducts 扳at plan爸ts in W跋innipeg翱 (pizza胺s), Tor翱onto (c疤akes) a襖nd Mont挨real (p翱ies). W癌hile ea罷ch plan哀t opera版ted as 翱a profi搬t(yī) cente疤r, they扒 shared捌 a comm礙on sale襖s force翱 locate暗d at th案e compa白ny hea版d offic壩e in Mo安ntreal.凹 Althou艾gh the

5、敗Toronto翱 plant 暗was res埃ponsibl壩e for o白ver 40%暗 of cor奧porate 壩revenue骯s in fi翱scal 19版94, and拜 the ot伴her pla叭nts was盎 accoun澳ted for癌 about 叭30% eac盎h, all 吧three d背ivision氨s contr愛(ài)ibuted 襖equally捌 to pro敖fits. T般he comp班any enj瓣oyed st白rong co半mpetiti胺ve posi班tions i案n all t靶hree ma啊rkets a笆nd

6、it w背as the 版low cos艾t produ哎cer in 捌the piz白za mark盎et. Inc斑ome Sta板tements耙 and Ba艾lance S叭heets f班or the 昂1993 to愛(ài) 1995 f耙iscal y辦ears ar哎e in Ex背hibits 暗1 and 2巴, respe壩ctively拔.昂Laurent伴ian sol罷d most 百of its 伴product阿s to la吧rge gro傲cery ch癌ains, a扳nd in f隘act, su暗pplying罷 severa暗l Canad埃ian c

7、ha疤ins wit跋h priva百te labe骯l brand跋 pizzas按 genera爸ted muc半h of th癌e sales熬 growth胺. Other跋 sales 半were ma拜de to i骯nstitut懊ional f版ood ser礙vices.邦The com安panys 胺success背 was, i拔n part,靶 the pr啊oduct o半f its m扮anageme扮nts ph礙ilosoph柏ies. Th搬e corne拜rstone 叭of Laur埃entian埃s opera頒tions w盎as its 頒inclu

8、di伴ng a co八mmitmen笆t to a 笆busines暗s strat啊egy pro班moting 鞍continu愛(ài)ous imp佰rovemen背t; for 擺example礙 all em八ployees搬 were e俺mpowere襖d to th敖ink abo澳ut and 般make su霸ggestio奧ns for 爸ways of八 reduci鞍ng wast叭e. As D斑anielle瓣 Knowle襖s saw i矮t: “Con半tinuous靶 improv扒ement i安s a way巴 of lif班e at La澳uremtia白n

9、.” Als凹o(jì), the 埃company澳 was kn霸own for敖 its ab拔ove a奧verage 凹conside鞍ration 把for the白 human 拌resourc礙e and e絆nvironm芭ental i搬mpact o唉f its b扒usiness盎 decisi邦ons. Th安ese phi靶l(wèi)osophi挨es drov暗e all p頒olicy-m八aking, 骯includi奧ng thos唉e polic敖ies gov艾erning 吧capital矮 alloca巴tion.敗Daniell哎e Knowl阿es罷Daniel

10、l邦e Knowl癌ess ca氨reer, w懊hich sp敗anned 1版3 years扒 in the澳 food i挨ndustry霸, had i案ncluded哎 positi扳ons in 按other f拔unction斑al area拌s such 疤as mark骯eting a按nd fina暗nce. Sh懊e had r氨eceived隘 an und俺ergradu般ate deg皚ree in 拔mechani芭cal eng擺ineerin挨g from 佰Queens熬 Univer昂sity in靶 Kingst叭on, Ont斑ario, a叭nd a

11、 ma艾ster of啊 busine罷ss admi按nistrat稗ion fro藹m the W鞍estern 絆Busines氨s Schoo把l.半THE PIZ扒ZA INDU拌STRY隘Major s氨egments扳 in the礙 pizza 愛(ài)market 唉were fr芭ozen pi白zza, de擺li-fres胺h chill昂ed pizz芭a, rest佰aurant 翱pizza a鞍nd take靶-out pi把zza. Of搬 these 盎four, r靶estaura芭nt and 癌take-ou絆t were 班the lar皚gest. W安

12、hile th哀ese seg阿ments c爸onsiste襖d of th懊ousands昂 of sma叭ll-owne凹d estab伴lishmen啊ts, a f靶ew larg靶e North柏 Americ奧an chai邦ns, whi凹ch incl伴uded Do阿minos,擺 Pizza 敖Hut and吧 Little隘 Caesar靶s, dom案inated.哀Althoug班h 12 fi伴rms man按ufactur翱ed froz鞍en pizz澳as in C胺anada, 把the fiv邦e large唉st firm拜s, incl敗uding

13、L澳aurenti扳an, acc瓣ounted 拜for 95%絆 of pro瓣duction挨. McCai啊n Foods疤 was th邦e marke罷t leade艾r with 背44% mar挨ket sha把re, whi八le Laur班entian 啊had 21%背. Per c扮apita c哀onsumpt翱ion of 扮frozen 班product挨s in Ca瓣nada wa岸s one-t案hird of癌 the le拔vel in 把U.S. wh八ere ret挨ail pri跋ces wer礙e lower耙.愛(ài)ECONOMI胺C CONDI背

14、TIONS皚The Nor埃th Amer扮ican ec唉onomy h版ad enjo礙yed str哎ong gro半wth sin版ce 1993艾, after凹 having吧 suffer跋ed a se凹vere re盎cession懊 for th柏e two p半revious愛(ài) years.背 Intere絆st rate唉s botto靶med-out罷 in mid百-1994, 暗after w愛(ài)hich th把e U.S. 暗Federal靶 Reserv伴e slowl搬y incre巴ased ra叭tes unt哀il earl疤y 1995 澳in an

15、a矮ttempt 背to figh背t infla岸tionary頒 pressu襖res. Ne氨verthel班ess, No按rth Ame愛(ài)rican i罷nflatio艾n was e佰xpected挨 to ave絆rage 3%懊 to 5%a頒nnually鞍 for th隘e fores跋eeable 凹future.鞍 The Ba板nk of C礙anada f昂ollowed班 the U.岸S. Fede敖ral Res艾erves 拜lead an敗d incre阿ased in捌terest 隘rates, 佰in part拌 to pro靶tect th般e C

16、anad礙ian dol按lars v鞍alue re阿lative 伴to the 藹value o昂f the U半.S. dol哎lar. Th版e resul胺t was a辦 North 盎America按n growt皚h rate 埃of gros耙s domes板tic pro拌duct th靶at was 藹showing阿 signs 霸of slow襖ing dow扳n.扒LAURREN懊TIANS 挨PROJECT把 REVIEW胺 PROCES柏S鞍Prior t奧o the a半pproval稗 of any吧 capita瓣l alloc藹ation, 愛(ài)each

17、 op皚erating胺 divisi澳on was 氨require敖d to de氨velop b礙oth a S巴trategi壩c and a版n Opera挨ting Pl靶an. The吧 Strate案gic Pla辦n had t艾o ident翱ify and哀 quanti扒fy eith拌er inef壩ficienc拔ies or 般lost op邦portuni敗ties an奧d estab絆lish ta癌rgets f笆or thei靶r elimi胺nation,拔 includ八e a thr版ee-year癌 plan o矮f capit佰al requ胺

18、irement捌s, link扮 capita邦l spend斑ing to 隘busines拌s strat笆egies a埃nd cont扮inuous 愛(ài)improve八ment ef芭fort, a翱nd achi班eve the吧 compan罷y-wide 挨hurdle 鞍rates.扳The fir頒st year案 of the爸 Strate藹gic Pla叭n becam埃e the A佰nnual O襖peratin懊g Plan.捌 This w邦as supp搬orted b癌y a det傲ailed l隘ist of 班propose案d capit癌al pr

19、oj頒ects wh骯ich bec絆ame the斑 basis 哀for cap傲ital al埃locatio扳n. In a扒ddition昂 to mee挨ting al皚l Strat八egic Pl氨an crit靶eria, t巴he Oper疤ating P稗lan had捌 to ide扒ntify m疤ajor co笆ntinuou八s impro唉vement 拜initiat辦ives an辦d budge絆t for t傲he asso笆ciated 半benefit熬s, as w班ell as 隘develop靶 a trai拌ning pl襖an iden傲t

20、ifying唉 specif礙ic trai靶ning ob哎jective疤s for t岸he year芭.案These c捌riteria靶 were u澳sed by 版head of笆fice to熬 keep t拔he beha捌vior of靶 divisi芭onal ma芭nagers 阿consist矮ent wit瓣h corpo斑rate ob佰jective拌s. For 昂example芭, the r跋equirem霸ent to 罷develop哎 a trai安ning pl斑an as p芭art of 艾the ope跋rationa爸l plan 隘for

21、ced 澳manager罷s to be俺 effici癌ent wit絆h emplo板yee tra八ining a半nd to k跋eep con埃tinuous把 improv昂ement a柏s the u霸ltimate翱 object案ive.矮All pro唉posed p爸rojects邦 were s捌ubmitte翱d on an阿 Author癌ization拌 for Ex百penditu鞍re (AFE搬) Form 啊for rev哀iew and唉 approv啊al (see芭 Exhibi半t 3). T骯he AFE 般had to 藹present襖 t

22、he pr跋ojects奧 linkag半e to th爸e busin班ess str凹ategies哀. In ad礙dition,胺 it had盎 to inc懊lude sp吧ecific 壩details般 of eco暗nomics 班and eng疤ineerin搬g, invo巴lvement版 and em案powerme叭nt, hum拜an reso安urce, a哀nd the 擺environ絆ment. T暗his req癌uiremen哀t ensur敖ed that鞍 projec芭ts had 稗been ca伴refully半 though稗t throu

23、阿gh by f鞍orcing 跋manager邦s to li鞍st the 安items p絆urchase埃d, the 哀employe班es invo埃lved in岸 the pr拔oject, 埃the emp罷loyees 埃adverse跋ly affe愛(ài)cted by吧 the pr敖oject, 百and the柏 effect啊 of the半 projec哎t on th敖e envir吧onment.班Approva背l of a 叭capital搬 expend爸iture p搬roposal半 was co隘ntingen胺t on th背ree req板uir

24、emen半ts whic暗h are i靶l(wèi)lustra芭ted in 奧Exhibit靶 4. The埃 first 吧of thes隘e requi邦rements阿 was th搬e opera奧ting di罷vision爸s demon斑strated翱 commit襖ment to暗 contin氨uous im傲proveme罷nt (C.I愛(ài).), the把 criter搬ia of w半hich ar襖e descr辦ibed in敗 Exhibi爸t 5. Th氨e secon骯d requi昂rement 盎was tha疤t all p阿rojects靶 of mor俺

25、e than 斑$300,00胺0 be in皚cluded 伴in the 襖Strateg昂ic Plan傲. The f搬inal re澳quireme氨nt was 壩that fo巴r proje耙cts gre襖ater th靶an $1 m骯illion,鞍 the op扒erating胺 divisi氨on had 白to achi氨eve its扮 profit矮 target奧. Howev拔er, if 案a proje懊ct fail壩ed to m版eet any版 of the骯se requ敖irement阿s, ther斑e was a頒 mechan笆ism

26、thr靶ough wh礙ich eme澳rgency 扳funds m吧ight be礙 alloca胺ted sub哀ject to隘 the co暗rporate吧 execut佰ive com絆mittee氨s revie奧w and a昂pproval絆. If th按e proje拔ct was 矮less th耙an $1 m吧illion 巴and it 稗met all按 three 盎require靶ments, 叭only di百visiona敗l revie扮w and a伴pproval盎 was ne胺cessary襖. Other伴wise, a把pproval隘

27、was ne半eded fr斑om the 阿executi敗ve comm半ittee.八The pro把posed W白innipeg胺 plant 鞍project耙 was co搬nsidere壩d a cla吧ss 2 pr埃oject a隘s the e癌xpendit傲ures we襖re mean拌t to in哀crease 伴capacit熬y for e敖xisting暗 produc巴ts or t扮o estab叭lish a 斑facilit邦y for n昂ew prod翱ucts. C疤apital 瓣project斑s could背 fall i挨nto on

28、e疤 of thr辦ee othe氨r class板e(cuò)s: cos笆t reduc扒tion (C挨lass 1)奧; equip跋ment or懊 facili隘ty repl半acement般 (Class按 3); or傲 other 背necessa暗ry expe絆nditure佰s for R跋&D, pro霸duct im背proveme安nts, qu敗ality c捌ontrol 安and con稗currenc按e with 哎legal, 襖governm唉ent, he白alth, s絆afety o阿r insur敖ance re扳quireme襖nts inc愛(ài)lu

29、ding 哎polluti罷on cont辦rol (Cl阿ass 4).按 A proj斑ect spe壩nding a邦udit wa阿s requi敗red for巴 all ex澳penditu辦res; ho背wever, 捌a savin辦gs audi唉t was a伴lso nee斑ded if 把the pro挨ject wa拔s consi艾dered e啊ither 1澳 or 2. 扳Each cl安ass of 搬project瓣 had a 頒differe背nt hurd邦le rate懊 reflec安ting di絆fferent安 levels疤 of ri

30、s百k. Clas拌s 1 pro阿jects w敖ere con笆sidered斑 the mo瓣st risk按y and h叭ad a hu俺rdle ra胺te of 2吧0%. Cla拌ss 2 an版d Class凹 3 proj搬ects ha般d hurdl翱e rates阿 of 18%版 and 15吧%, resp佰ectivel艾y.昂Knowles板 was re胺sponsib懊le for 挨develop岸ing the皚 Winnip把eg divi柏sions 挨Capital辦 Plan a靶nd comp把leting 懊all AFE暗 forms.絆

31、WINNIPE懊G PLANT拔S EXPA罷NSION O哎PTIONS跋Laurent隘ian had暗 manufa笆ctured 挨frozen 熬pizzas 擺at the 靶Toronto安 plant 阿until 1拜992. Ho襖wever, 耙after t扮he comp案any bec叭ame the巴 sole s瓣upplier疤 of pri半vate-la拔bel fro邦zen piz頒zas for絆 a larg敗e groce白ry chai壩n and w佰as forc背ed to s百ecure a擺ddition壩al capa按city,

32、i柏t acqui八red the拔 Winnip扒eg froz拜en pizz安a plant跋 from a矮 compet般itor. A昂 progra斑m of re鞍gular m挨aintena辦nce and稗 equipm敗ent rep扳lacemen案t made 凹the new扮 plant 癌the low白 cost p藹roducer敗 in the佰 indust胺ry, wit岸h an op辦erating板 margin懊 that a八veraged班 15%.擺The pla皚n, with爸 its pr辦oven co岸mmitmen笆t to

33、 co挨ntinuou耙s impro板vement,啊 had su懊ccessfu哀lly met拌 its pr熬ofit ob啊jective拌 for th辦e past 伴three y岸ears. A昂fter th拜e short盎age of 疤capacit昂y had b版een ide唉ntified八 as the藹 plant敖s large敗st sour胺ce of l罷ost opp背ortunit骯y, mana骯gement 皚was eag跋er to r翱ectify 罷this pr柏oblem a俺s targe壩ted for岸 in the啊

34、Strate襖gic Pla叭n. Beca百use the版 facili頒ty had 哀also in壩cluded 岸the pro邦posed p氨lant ex胺pansion埃 in its隘 Strate岸gic Pla凹n, it m半et all 俺three r胺equirem岸ents fo矮r consi阿deratio扳n of ap拔proval 耙for a c按apital 頒project邦.暗A(chǔ)nnual 霸sales h半ad matc斑h(yuǎn)ed pla扮nt capa暗city of艾 10.9 m俺illion 跋frozen 案pizzas 耙whe

35、n La骯uentian凹 conclu鞍ded tha瓣t oppor白tunitie擺s simil鞍ar to t鞍hose in骯 Canada案 existe靶d in th靶e U.S. 阿An oppo版rtunity笆 surfac巴ed wher稗eby Lau骯rentian疤 could 奧have an百 exclus阿ive arr挨angemen絆t to su安pply a 頒large U奧.S.-bas拌ed groc隘ery cha叭in with礙 its pr白ivate-l把a(bǔ)bel-br骯and fro罷zen piz靶zas beg八inning

36、半in Apri敗l, 1996奧. As a 柏result 把of this鞍 arrang唉ement, 安frozen 板pizza s斑ales wo氨uld inc班rease r澳apidly,霸 adding襖 2.2 mi胺llion u伴nits in半 fiscal絆 1996, 辦another佰 1.8 mi板llion u澳nits in艾 fiscal扮 1997, 搬and the叭n 1.3 m熬illion 搬additio捌nal uni搬t(yī)s to r皚each a 昂total o啊f 5.3 m奧illion 柏additio般nal uni盎ts

37、by f罷iscal 1背998. Ho背wever, 柏the ter哀ms of t骯he agre拔ement w班ould on啊ly prov背ide Lau笆rentian吧 with g皚uarante矮ed sale敗s of ha瓣lf this疤 amount敖. Knowl芭es expe暗cted th埃at ther岸e was a隘 50% ch唉ance th瓣at the 辦grocery癌 chain 稗would o靶rder on澳ly the 壩guarant伴eed amo班unt. La啊urentia唉n sold 擺frozen 扮pizzas

38、胺to its 俺custome拌rs for 傲$1.7 in瓣 1995 a皚nd pric白es were懊 expect敗ed to i懊ncrease伴 just e版nough t瓣o keep 芭pace wi唉th infl耙ation. 壩Product盎ion cos擺ts were百 expect版ed to i邦ncrease昂 at a s氨imilar 邦rate.把Laurent背ian had胺 consid挨ered, b版ut reje哎cted, t愛(ài)hree ot敖her alt爸ernativ拌es to i芭ncrease拌 its fr白o(hù)zen

39、pi啊zza cap壩acity. 頒First, 爸the acq奧uisitio骯n of a 埃competi暗tors f拌acility半 in Can扳ada had頒 been r按ejected熬 becaus跋e the e伴quipmen稗t would佰 not sa安tisfy t癌he imme扳diate c搬apacity疤 needs 俺nor ach版ieve th辦e cost 敗reducti吧on poss爸ible wi瓣th expa頒nsion o靶f the W骯innipeg啊 plant.澳 Second埃, the a罷cquisit白io

40、n of 捌a compe般titor i拜n the U鞍.S. had奧 been r疤ejected笆 becaus伴e the a般vailabl班e plant爸 would 挨require靶 a capi敗tal inf哎usion d氨ouble t白hat req澳uired i爸n Winni笆peg. As熬 well, 拌there w礙ere ris班ks that芭 the pr盎oduct q扒uality 敖would b拜e infer哀ior. La隘st, the岸 expans絆ion of 熬the Tor叭onto ca胺ke plan昂t had

41、b笆een rej岸ected a安s it wo拜uld req按uire a 板capital拌 outlay骯 simila矮r to th暗at in t盎he seco辦nd alte哀rnative皚. The o耙nly rem案aining 耙alterna唉tive wa絆s the e藹xpansio皚n of th百e Winni白peg pla拜nt. By 案keeping愛(ài) the fr柏ozen pi百zza in 邦Winnipe隘g, Laur板e(cuò)ntian 皚could b啊etter e案xploit 斑economi哀es of s絆cale an礙d

42、assur澳e consi板stently胺 high p扮roduct 愛(ài)quality埃.霸The Pro敖posal 頒The exp唉ansion 拜proposa氨l, whic板h would柏 requir岸e six m懊onths t扳o compl佰ete, wo癌uld rec笆ommend 百four ma絆in expe安nditure霸s: expa襖nding t敗he exis阿ting bu氨ilding 搬in Winn拌ipeg by頒 60% wo澳uld cos俺t $1.3 班million哀; addin拌g a spi般ral fre凹ezer,

43、 $耙1.6 mil白lion; i半nstalli罷ng a ne邦w high 白speed p懊izza pr瓣ocessin半g line,氨 $1.3 m癌illion;敗 and ac白quiring白 additi熬onal wa扮rehouse案 space,半 $600,0疤00. Inc班l(xiāng)uding 敖$400,00昂0 for c奧ontinge疤ncy nee癌ds, the扳 total 拜cash ou氨tlay fo矮r the p班roject 拌would b翱e $5.2 鞍million笆. The e懊quipmen捌t was e奧xpected阿

44、to be 伴useful 拜for 10 芭years, 拜at whic唉h point懊 its sa敗lvage v伴alue wo擺uld be 耙zero.頒The lan八d on wh昂ich the胺 Winnip把eg plan拜t was b壩uilt va埃lued at般 250,00敗0 and n跋o addit班ional l瓣and wou柏ld be n版ecessar疤y for t八he proj靶ect. Wh皚ile the伴 expans胺ion wou頒ld not 半require鞍 Lauren白tian to把 increa拔se the

45、艾size of版 the pl按ants a矮dminist懊rative 板staff, 氨Knowles鞍 wonder柏ed what盎 portio暗n, if a板ny, of 按the $22伴3,000 i捌n fixed邦 salari翱es shou拔ld be i柏ncluded伴 when e扮valuati皚ng the 艾project矮. Likew拌ise, sh胺e estim拔ated th敗at it c挨ost Lau按rentian霸 approx八imately扒 $40,00啊0 in sa疤les sta叭f(wàn)f time搬 and ex艾pans

46、es 愛(ài)to secu叭re the 般U.S. co靶ntract 邦that ha白d creat爸ed the 吧need fo翱r extra扒 capaci挨ty. Las拌t, net 隘working頒 capita俺l needs癌 would 拔increas白e with 翱additio哎nal sal胺es. Wor把king ca熬pital w挨as the 斑sum of 爸invento阿ry and 半account熬s recei耙vable l傲ess acc吧ounts p版ayable,拔 all of奧 which 半were a 阿functio捌

47、n of sa斑les. Kn笆owles e隘stimate鞍d, howe扮ver, th半at the 斑new hig般h-speed伴 line w罷ould al扒low the板 compan壩y to cu辦t two d阿ays fro白m avera擺ge inve靶ntory a澳ge.澳Added t伴o the b斑enefit 懊derived藹 from i埃ncrease叭d sales靶, the p骯roject 吧would r澳educe p襖roducti扒on cost翱s in tw啊o ways.霸 First,按 the ne熬w high-百

48、speed l八ine wou巴ld redu凹ce plan靶t-wide 壩unit co般st by $百0.009, 骯though 安only 70斑% of th耙is incr翱eased e伴fficien胺cy woul霸d be re搬alized 按in the 氨first y敗ear. Th背ere was傲 an equ版al chan傲ce, how背ever, t搬hat onl叭y 50% o頒f these傲 saving翱s could般 actual哎ly be a胺chieved扒. Secon扳d, “oth稗er” sav擺ings to岸tali

49、ng 礙$138,00背0 per y隘ear wou藹ld also澳 result熬 from t啊he new 案line an昂d would辦 increa暗se each扮 year a稗t the r頒ate of 百inflati八on.奧Each ye拔ar, a c板apital 阿cost al把lowance扒 (CCA),哀 akin t瓣o depre巴ciation澳, would罷 be ded巴ucted f版rom ope扒rating 熬income 癌as a re板sult of愛(ài) the ca伴pital e敖xpendit扮ure. Th骯is d

50、edu熬ction, 敗in turn吧, would阿 reduce靶 the am癌ount of班 corpor伴ate tax唉 paid b盎y Laure俺ntian. 澳In the 把event t拌hat the阿 compan罷y did n俺ot have瓣 positi叭ve earn凹ings in礙 any ye佰ar, the霸 CCA de案duction跋 could 翱be tran斑sferred昂 to a s熬ubseque翱nt year跋. Howev岸er, cor班porate 挨earning扒s were 扮project白ed to b般

51、e posit傲ive for跋 the fo岸reseeab百le futu鞍re. Kno昂wles co板mpiled 芭the eli版gible C礙CA dedu懊ction f按or 10 y疤ears (s叭ee Exhi耙bit 6).白 For th凹e purpo頒se of h霸er anal氨ysis, s板he assu阿med tha白t all c唉ash flo耙ws woul岸d occur罷 at the癌 approp拌riate y叭ear-end唉.艾Three a埃reas of啊 enviro瓣nmental案 concer隘n had t皚o

52、be ad辦dressed擺 in the拔 propos敗al to e伴nsure b岸oth con頒formity霸 with L哀aurenti襖an poli壩cy and 疤complia伴nce wit版h regul暗atory b傲odies a板nd loca昂l by-la翱ws. Fir鞍st, des凹ign and扳 instal瓣lation 絆of sani跋tary dr阿ain sys胺tems, i礙ncludin罷g re-ro爸uting o霸f exist癌ing dra爸ins, wo拔uld imp熬rove sa斑nitatio案n prac

53、t挨ices of辦 efflue安nt/wast疤ewater 捌dischar半ge. Sec捌ond, th百e provi唉sion of拜 water-稗flow re骯cording柏 meters爸 would 跋quantif傲y water板 volume罷s consu昂med in 笆manufac版turing 斑and hel版p to re叭duce it傲s usage藹. Last,阿 the re板frigera凹tion pl耙ant wou爸ld use 罷ammonia巴 as the藹 coolan八t as op伴posed t班o chlor哎o-

54、fluro啊-carbon艾s. Thes芭e initi頒atives 熬were co拌nsidere斑d suffi巴cient t斑o satis白fy the 笆criteri芭a of th骯e Capit按al Allo埃cation 敖Policy.敗THE DEC扒ISION唉Knowles叭 believ皚ed that傲 the pr吧oject w昂as cons按istent 佰with th盎e compa版nys bu俺siness 盎strateg凹y since罷 it wou霸ld ensu捌re that扳 the Wi阿nnipeg 傲plant c白o(hù)

55、ntinue搬d to be哎 the lo懊w cost 芭produce鞍r of fr白o(hù)zen pi拔zzas in胺 Canada澳. Howev叭er, she笆 knew t絆hat her板 analys扮is must唉 consid礙er all 襖factors藹, inclu熬ding th頒e proje翱cts ne皚t prese阿nt valu按e. The 版plants鞍 capita襖l alloc扳ation r皚eview c阿ommitte骯e would阿 be fol靶l(wèi)owing 按the pro捌cedures矮 set ou罷t in th

56、扒e compa笆nys Ca扮pital A愛(ài)llocati壩on Poli扳cy as t敖he basi矮s for r癌eviewin八g her r佰ecommen扒dation.靶Knowles拜 consid案ered th辦e impli拔cations霸 if the稗 projec搬t(yī) did n襖ot prov叭ide suf熬ficient板 benefi拜t to co挨ver the罷 Class 耙2 hurdl哎e rate 班of 18%.百 Enteri愛(ài)ng the 敖U.S. gr斑ocery c熬hains m凹arket w藹as a tr唉emen

57、dou拜s oppor靶tunity 巴and she背 consid扮ered wh愛(ài)at othe班r busin邦ess cou般ld resu霸lt from拌 Lauren扳tians 疤increas扒ed pres把ence. S岸he also壩 wonder版ed if t案he hurd啊le rate罷 for a 艾project罷 that w盎as mean艾t to in板crease 骯capacit氨y for a矮n exist懊ing pro傲duct sh氨ould be斑 simila藹r to th矮e compa襖nys co哀st of c埃ap

58、ital,熬 since 罷the ris板k of th懊e proje鞍ct shou昂ld be s辦imilar 氨to the 罷overall埃 risk o翱f the f叭irm. Sh俺e knew 稗that La巴urentia拌ns boa鞍rd of d扮irector啊s estab霸lished 阿a targe暗t capit扳al stru罷cture t傲hat inc埃luded 4絆0% debt板. She a埃lso rev氨iewed t吧he curr啊ent Can拜adian m板arket b霸ond yie頒lds, wh拌ich are

59、板 listed挨 in Exh罷ibit 7.背 The sp愛(ài)read be藹tween G艾overnme版nt of C八anada b捌onds an翱d those唉 of cor扳poratio盎ns with霸 bond r襖atings 頒of BBB,拌 such a阿s Laure笆ntian, 稗had rec案ently b俺een abo背ut 200 半basis p熬oints (斑2%) for隘 most l暗ong-ter挨m matur柏ities. 礙Finally壩, she d擺iscover笆ed that八 Lauren襖tians 吧stoc

60、k b伴eta was胺 0.85, 敖and tha澳t, hist柏oricall岸y, the 辦Toronto班 stock 傲market 啊returns柏 outper暗formed 班l(xiāng)ong-te拔rm gove搬rnment 叭bonds b耙y about翱 6% ann跋ually.襖EXHIBIT礙 1礙INCOME 絆STATEME艾NT靶For The翱 Year E哎nding M拜arch 31半($ mill扮ions) 瓣 氨 斑 邦 胺 拜 佰 拜 澳 1拌993 般 1994 叭 1995氨 鞍 把 R挨evenues礙 扒 藹 搬 $91敗.2 跋