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Flash Memory

Senior Seminar: Finance
by

Devon Sweeney

on 4 December 2012

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Transcript of Flash Memory

0 + - = 9 8 7 1 2 3 4 5 6 c Break-Even Analysis If Sales 6.83% then NPV = 0 FLASH MEMORY, INC. Electronic Device Memory Market

Intense Competition

Investment Opportunity Agenda I. Synopsis of Flash Memory, Inc.

II. Break-even Analysis

III. Sensitivity Analysis

IV. Scenario Analysis Scenario Analysis Cost Over-Runs Scenario Costs may be higher than expected:
Capex $250,000
COGS by 6%
SGA by 2.37%
'11 MKT Campaign by $50,000 Questions? Break-Even Analysis Major Assumptions FLASH MEMORY, INC. Devon Sweeney | Hrehan Hakeem Price of product
Number of items sold WHAT?! WHY?! An analysis to determine the point at which revenue received equals the costs associated with receiving the revenue Adjusting sales impacted:
Taxable Income
Taxes Paid
Free Cash Flow Fixed Items:
CAPEX
COGS
SGA
NWC
Depreciation Sensitivity Analysis Break-Even Analysis Huge Assumptions Made:
Market Premium
Beta of Assets
COGS Reduced Marketing Approach Spend Less Money Marketing
Eliminate '11 MKT campaign
SGA 20%
Sales 8% ACCEPT (20%) (8%) ($300,000) REJECT ($250,000) (85% sales) (11% sales) ($300,000) ( 6.826%) Recommendation Accept with caution
More research on all assumptions
Sales cannot dip below 6%
COGS % to sales ratio must be 85% or below
Full transcript