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Analysis Of The Senior Managers Of Euroland Foods

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Finance Paper Stan Nelson Part I. State the Issues The issues in this case are clear. Euroland has a long history that at one time dominated the market. Unfortunately, our days as leader have vanished. We are currently trading at a price below comparable companies. This can be attributed to our reduced profitability and our failure to gain sufficient market share for new products. The market signaling for Euroland is not good. Analysts are encouraging people to sell their stocks. Clearly, we need to pursue strategies that drive up their stock price in the interest of stock holders. This includes increasing our net income and gross sales. To stay competitive and capture the market share that has been lost, significant investments will need to be made into the company. Part II. Critique Capital Budget Process The senior managers of Euroland Foods provided us with a wish list of eleven projects that they would like to see be part of the company’s capital budget. These projects would total €316M. You, the board of directors have imposed a capital rationing of €120M. We need to look at how to prioritize these eleven projects to determine which ones will have the biggest impact and create long term profitability for the company. Euroland did a good job of soliciting investment proposals from its managing directors. All the proposals provided a brief description and a combination of financial, strategic and qualitative reasoning for why the proposal

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