Hart Venture Capital Essay

Case examine 1 purify Fitness, Inc. (BFI), manufactures exercise equipment at its plant in Freeport, Long Island. It recently intentional two universal weight machines for the home exercise market. Both machines drill BFI-patented technology that provides the user with an extremely wide range of motion force for sepa set uply type of exercise performed. Until now, such capabilities train been ready(prenominal) unaccompanied on expensive weight machines used primarily by somatogenetic therapists. At a recent trade show, demonstrations of the machines resulted in significant bargainer interest.In fact, the issue of blesss that BFI received at the trade show remote exceeded its manufacturing capabilities for the current production period. As a result, management decided to beget production of the two machines. The two machines, which BFI named the BodyPlus c and the BodyPlus two hundred, require different amounts of resources to originate. The BodyPlus 100 consists of a draw unit, a press put up, and a pec-dec station. individually(prenominal)(prenominal) frame uncoverd uses 4 proceeding of machining and weld epoch and 2 hours of word picture and finale date.Each press station requires 2 hours of machining and join time and 1 hour of painting and finishing time, and distributively pec-dec station uses 2 hours of machining and join time and 2 hours of painting and finishing time. In addition, 2 hours are exhausted assembling, testing, and promotion each BodyPlus 100. The raw material be are $450 for each frame, $300 for each press station, and $250 for each pec-dec station packaging be are estimated to be $50 per unit. The BodyPlus 200 consists of a frame unit, a press station, a pec-dec station, and a legpress station.Each frame produced uses 5 hours of machining and welding time and 4 hours of painting and finishing time. Each press station requires 3 hours machining and welding time and 2 hours of painting and finishing time, each pec-dec station uses 2 hours of machining and welding time and 2 hours of painting and finishing time, and each legpress station requires 2 hours of machining and welding time and 2 hours of painting and finishing time. In addition, 2 hours are spent assembling, testing, and packaging each Body-Plus 200.The raw material costs are $650 for each frame, $400 for each press station, $250 for each pec-dec station, and $200 for each leg-press station packaging costs are estimated to be $75 per unit. For the next production period, management estimates that 600 hours of machining and welding time, 450 hours of painting and finishing time, and 140 hours of assembly, testing, and packaging time will be available. Current labor costs are $20 per hour for machining and welding time, $15 per hour for painting and finishing time, and $12 per hour for assembly, testing, and packaging time.The market in which the two machines must compete suggests a sell price of $2400 for the BodyPlus 100 and $3500 for the BodyPlus 200, although some flexibility may be available to BFI because of the unique capabilities of the new machines. Authorized BFI dealers can purchase machines for 70% of the suggested sell price. BFIs president believes that the unique capabilities of the BodyPlus 200 can help built in bed BFI as one of the leaders in high-end exercise equipment. Consequently, he has tell that the number of units of the BodyPlus 200 produced must be at least 25% of the fundamental production.managerial Report Analyze the production problem at Better Fitness, Inc. , and attire a calculate for BFIs president presenting your findings and recommendations. let in (but do not limit your watchword to) a consideration of the pursuit items 1. What is the recommended number of BodyPlus 100 and BodyPlus 200 machines to produce? 2. How does the requirement that the number of units of the BodyPlus 200 produced be at least 25% of the follow production come to cyberspaces? 3. Wh ere should efforts be expended in order to increase profits? accept a copy of your delimitar programming instance and graphical closure in an appendix to your report.Case study 2 Hart impale Capital (HVC) specializes in providing venture cap for software development and earnings applications. Currently HVC has two investment opportunities (1) protection Systems, a firm that needs surplus slap-up to develop an Internet security software package, and (2) market place epitome, a market research company that needs extra capital to develop a software package for conducting customer satisfaction surveys.In exchange for credential Systems bloodline, the firm has asked HVC to provide $600,000 in course of study 1, $600,000 in year 2, and $250,000 in year 3 over the coming three-year period. In exchange for their stock, Market Analysis has asked HVC to provide $500,000 in year 1, $350,000 in year 2, and $400,000 in year 3 over the same three-year period. HVC believes that tw ain investment opportunities are worth pursuing. However, because of other investments, they are willing to make at close $800,000 for both looks in the first year, at most $700,000 in the second year, and $500,000 in the third year.HVCs financial outline team reviewed both images and recommended that the companys accusative should be to increase the net present apprise of the total investment in Security Systems and Market Analysis. The net present value takes into account the estimated value of the stock at the end of the three-year period as well as the capital outflows that are necessary during each of the three years. Using an 8% rate of return, HVCs financial analysis team estimates that 100% support of the Security Systems project has a net present value of $1,800,000, and 100% financing of the Market Analysis project has a net present value of $1,600,000.HVC has the option to investment company any percentage of the Security Systems and Market Analysis projects. Fo r example, if HVC decides to fund 40% of the Security Systems project, investments of 0. 40($600,000) _ $240,000 would be required in year 1, 0. 40($600,000) _ $240,000 would be required in year 2, and 0. 40($250,000) _ $100,000 would be required in year 3. In this case, the net present value of the Security Systems project would be 0. 40($1,800,000) _ $720,000. The investment amounts and the net present value for developial funding of the Market Analysis project would be computed in the same manner.managerial Report Perform an analysis of HVCs investment problem and prepare a report that presents your findings and recommendations. Include (but do not limit your word to) a consideration of the following items 1. What is the recommended percentage of each project that HVC should fund and the net present value of the total investment? 2. What capital allocation plan for Security Systems and Market Analysis for the coming three-year period and the total HVC investment each year would you recommend? . What effect, if any, would HVCs willingness to commit an additional $100,000 during the first year have on the recommended percentage of each project that HVC should fund? 4. What would the capital allocation plan look like if an additional $100,000 is made available? 5. What is your recommendation as to whether HVC should commit the additional $100,000 in the first year? Provide model details Case study 3 Digital Imaging (DI) produces photo fall guyers for both the professional and consumer markets.The DI consumer member recently introduced two photo printers that provide color prints rivaling those produced by a professional processing lab. The DI-910 model can produce a 4 _ 6 borderless print in approximately 37 seconds. The more sophisticate and faster DI-950 can even produce a 13 _ 19 borderless print. Financial projections show profit contributions of $42 for each DI-910 and $87 for each DI-950. The printers are assembled, tested, and packaged at DIs plant located in New Bern, North Carolina. This plant is highly automated and uses two manufacturing lines to produce the printers.Line 1 performs the assembly operation with times of 3 minutes per DI-910 printer and 6 minutes per DI-950 printer. Line 2 performs both the testing and packaging operations. Times are 4 minutes per DI-910 printer and 2 minutes per DI-950 printer. The shorter time for the DI-950 printer is a result of its faster print speed. Both manufacturing lines are in operation one 8-hour shift per day. Managerial Report Perform an analysis for Digital Imaging in order to determine how umpteen units of each printer to produce. Prepare a report to DIs president presenting your findings and recommendations.Include (but do not limit your discussion to) a consideration of the following 1. The recommended number of units of each printer to produce to maximize the total contribution to profit for an 8-hour shift. What reasons might management have for not implementing your re commendation? 2. Suppose that management also states that the number of DI-910 printers produced must be at least as great as the number of DI-950 units produced. Assuming that the objective is to maximize the total contribution to profit for an 8-hour shift, how many units of each printer should be produced?3.Does the solution you developed in social function (2) balance the total time spent on line 1 and the total time spent on line 2? why might this balance or lack of it be a apprehension to management? 4. Management requested an expansion of the model in scatter (2) that would provide a better balance between the total time on line 1 and the total time on line 2. Management wants to limit the difference between the total time on line 1 and the total time on line 2 to 30 minutes or less. If the objective is still to maximize the total contribution to profit, how many units of each printer should be produced?What effect does this work load balancing have on total profit in par t (2)? 5. Suppose that in part (1) management specified the objective of maximizing the total number of printers produced each shift rather than total profit contribution. With this objective, how many units of each printer should be produced per shift? What effect does this objective have on total profit and workload balancing? For each solution that you develop, include a copy of your linear programming model and graphical solution in the appendix to your report.