Euroland Foods

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Euroland Foods S.A. |

Appraisal of Proposed Projects |

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4/28/2011 |

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Executive Summary

The company is facing a lot of financial strain due to lack of confidence by the investors. The proposals obtained for further capital investment include both the expansion proposals and efficiency enhancement proposals. In view of the fact that the lack of confidence has resulted mainly from recent failed ventures and decreases in profitability, the company would be better off trying to stay put and consolidate at the moment. The company should go first for the betterment of its processes and enhancing its efficiency level. Later on, growth prospects can be analyzed and taken advantage of, especially in view of the fact that the company is facing severe cash flow strain and the reputation of the company hangs by the thread at the precise moment. The company should therefore go for the projects in the following proposed order:

* Effluent-water treatment at four plants (€ 06 million)

* New Plant (Dijon, France) (€ 45 million)

* Expanded Plant (Nuremberg, Germany) (€ 15 million)

* Expand Truck Fleet (€ 33 million)

* Either Expansion Plan (preferably southern)

This order corresponds to certain financial and non-financial factors identified in the further report. These can be found under the heading of analysis. This decision package would allow the company to enhance their own brand and regain investor confidence. This holds particularly true in view of the fact that the company has a very loyal customer base. This will help the company get out of the cash flow problems and then the company can go for growth prospects.

Statement of Issues

The financial managers of Euroland currently face a lot of issues. These include:

* The limitation on the spending is a big hurdle and might cause to lose future growth prospects.

* They already face a lot of criticism on recent failed projects. This might make...