Rail Road Case
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Publicado: 4 de agosto de 2012
+FZ 2004 FINANCIAL PROYECT EVALUATION AND VALUATION
Rail Road Case
RailRoad Case
Felipe Martinez CPA MAF MCP
Taken from Sapag Chapter 15 for academic purposes.
Monday, September 06,2010
A group of investors own all the stocks of FerroMex S.A. This company was created with the purpose of offering an alternative transportation service, at a competitive price. The national andinternational growth experienced motivated the investors to evaluate the possibility to launch an alternate rail road route.
The new business consists in establishing a new route between Manzanilloand San Luis Potosi since these cities represent a high traffic of goods, freight between these two locations is only possible with truck.
In its inception, the company acquired land worth $250,000for the construction of its administrative offices. The company leased for $24,000 USD per month for its rail road access and stations. The company obtained five locomotive engines with a cost of$40,000 USD each and 25 coach carts at a cost of $8,000 each. The costs for administrative reach $15,000 USD per year and maintenance and repair costs reach $20,000 per year.
A market study indicatedthat 10,000 tons of loads are transported currently by truck, it is expected that this volume grows in the next years. In this sense, it is projected that thanks to NAFTA the demand for goods grows10% in the next four years.
According to the results of surveys, during the first year of operations the company could attract 35% of the total freight market between these two destinations.However, the lower prices charged by FerroMex could lead to obtain an additional 5% per year until completing 50% of the total market. The price for metric ton transported currently reaches $300USD, pricethat will remain in real terms adjusting exclusively on changes in the INPC, estimated 5% per year.
The technical study reflected additional investments:
|Asset |Unit Value...
Rail Road Case
RailRoad Case
Felipe Martinez CPA MAF MCP
Taken from Sapag Chapter 15 for academic purposes.
Monday, September 06,2010
A group of investors own all the stocks of FerroMex S.A. This company was created with the purpose of offering an alternative transportation service, at a competitive price. The national andinternational growth experienced motivated the investors to evaluate the possibility to launch an alternate rail road route.
The new business consists in establishing a new route between Manzanilloand San Luis Potosi since these cities represent a high traffic of goods, freight between these two locations is only possible with truck.
In its inception, the company acquired land worth $250,000for the construction of its administrative offices. The company leased for $24,000 USD per month for its rail road access and stations. The company obtained five locomotive engines with a cost of$40,000 USD each and 25 coach carts at a cost of $8,000 each. The costs for administrative reach $15,000 USD per year and maintenance and repair costs reach $20,000 per year.
A market study indicatedthat 10,000 tons of loads are transported currently by truck, it is expected that this volume grows in the next years. In this sense, it is projected that thanks to NAFTA the demand for goods grows10% in the next four years.
According to the results of surveys, during the first year of operations the company could attract 35% of the total freight market between these two destinations.However, the lower prices charged by FerroMex could lead to obtain an additional 5% per year until completing 50% of the total market. The price for metric ton transported currently reaches $300USD, pricethat will remain in real terms adjusting exclusively on changes in the INPC, estimated 5% per year.
The technical study reflected additional investments:
|Asset |Unit Value...
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