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yaroslaw [1]
2 years ago
10

Explain three factors that had a negative impact on the financial performance of Unibic in its early years.

Business
1 answer:
Eddi Din [679]2 years ago
7 0

Hello. You forget to present the text to which this question refers. The text is:

In 2007, Lighthouse Funds acquired a 25% stake in Unibic from Unibic Australia for Rs. 200 million. In 2010, Unibic Australia started making losses and wanted to withdraw from the Indian market. At that time, Unibic operated solely in the premium, high-margin cookies segment in India, with a share of around 8%. It had a market presence primarily in south India and was exporting to the Middle East and Hong Kong. It had strategic alliances to make cookies for various private players. However, it was not yet making profits and was cashstrapped... Over the next few years, Unibic grew rapidly. Its growth was primarily fueled by the changes sweeping through the Indian biscuit industry, wherein glucose biscuits that had dominated the market, gradually lost out to cream biscuits and cookies. The reasons for the shift included rising disposable incomes leading to an increase in consumption of premium biscuits; a larger number of manufacturing facilities of premium biscuits; growing health awareness; innovation bringing in attractive new products; rising affordability of cookies; and increase in eye-catching packaging. Over the years, Unibic regularly introduced fresh and unique flavors, ultimately producing over 30 variants of cookies. Its products could be broadly categorized into chocolate, butter, milk, savory, and health. The company considered its target market to be between the ages of 14 and 40. It continued its efforts at innovation and produced new products which would appeal to its target market. In 2015, Unibic had used celebrity endorsement by signing on south Indian actor Shruti Hassan, for over a year.

It stated that it wanted someone who was relevant and would give the brand a boost to get to the numbers it wanted in the South...

Unibic didn’t advertise much in print media; TV remained the company’s core focus and got the largest chunk of its advertising spend, followed by digital and OOH. Instead of following the traditional strategy of having a similar marketing campaign across markets, Unibic employed a unique strategy in each market, thereby playing to its strengths in each market while keeping in mind the market conditions and consumption patterns...

From 2019 onward, Unibic started feeling the heat of the economic slowdown in India. The Indian economic slowdown of 2019 led to a serious and continuing decline in the country’s real estate, automobile and construction sectors and in overall consumption demand. The second quarter (July- September) of the financial year (April 2019-March 2020) witnessed a drastic fall in the gross domestic product (GDP) growth rate to 4.5%. The main reasons attributed to the fall in the GDP growth rate were – contraction in manufacturing activity, weakened investments, and lower consumption demand. As of 2020, Unibic had the largest wire cut cookie manufacturing plant in India. The plant had the capability to manufacture 100 tonnes of cookies each day, with five production lines. While it used 98% of its production capability to produce its own brand, the rest was used to manufacture for private label brands – six in India and 10 across the world. It had annual revenu7 es of Rs. 5 billion. It also exported its products to more than 21 countries including across Australia, North America, the UK, and Europe, Asia, the Middle East, and New Zealand. It derived 45% of its earnings from the south of India.

Answer and Explanation:

Unibic's main mistake was not to give importance to the fluctuation of demand for its products, in order to be able to adjust their prices to the demand rates that consumers presented. This is because as the demand for the product decreased, Unibic should decrease the price, allowing the product to remain attractive to consumers.

A second mistake was not following the standard of disclosure of other cookie makers. This is because if other companies that make cookies advertise their products in a specific place, it means that this place has a large number of cookie consumers, who will see the products and put them on their shopping lists.

A third mistake was the high expenditure on disclosure. Unibic decided to use the most expensive media vehicle to advertise a product, in addition to maintaining the contract with a celebrity, who should receive a high salary for his work. Unibic should have looked for cheaper vehicles, which would optimize its profit, but decrease spending.

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Answer:

0.488

Explanation:

Mean annual return for common stocks = 16.5%

standard deviation of annual return = 19%

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P ( Stock returns > 17% )

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3 years ago
On January 1, 2017, Alexis Company purchased a delivery truck for $60,000. They estimated the useful life of the truck to be 6 y
sweet [91]

Answer:

$14,800

Explanation:

The computation of the selling price of the truck is shown below:

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Now the depreciation for 5.5 years is

= $8,000 × 5.5 years

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Now book value is

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ANd, finally the selling price of the truck is

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3 years ago
The higher the risk of an investment, the ___________________ for the project. Group of answer choices lower the minimum desired
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Answer: the better prospects.

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3 years ago
The management of Kunkel Company is considering the purchase of a $27,000 machine that would reduce operating costs by $7,000 pe
Brrunno [24]

1) The machine's investment's net present value is (-1,767).

2) There will be an $8000 difference between cash inflows and outflows over the machine's lifetime, which hasn't been discounted.

A strategy used by businesses to assess the value of a project is capital budgeting. The profitability of the potential project or investment is evaluated using this method. It assesses the risks and potential returns of the investment. In capital budgeting, there are several approaches to evaluating a project. Internal rate of return, payback time, and net present value are a few of the techniques.

1. Calculation of the net present value of the investment:

Year   Cash Flows       Present Value         Present Value

                                      Factor (12%)

(a)              (b)                     (c)                              (b * c)

0           (-$27000)                 1                        (-$27000)

1                 $7000                 0.8929                  $6250

2                $7000                 0.7972                   $5580

3                $7000                 0.7118                     $4982

4                $7000                 0.6355                   $4449

5                $7000                 0.5674                   $3972

        NET PRESENT VALUE                              (-$1767)  

The investment in the machine has a net present value of (-1,767).

The device would save operating costs by $7,000 per year, based on the information in the question; as a result, it generates an annual cash inflow. The cash flows are multiplied by the value in accordance with the designated discounting factor for each phase of the machine's life. The net present value of the machine is ($1,767), which is a negative amount. The machine investment plan ought to be rejected as a result.

2) Calculate the difference between undiscounted cash inflows and outflows over the machine's lifetime as follows:

Difference = Undiscounted Cash Inflows - Undiscounted Cash Outflows

Difference = $35000 - $27000

Therefore, the difference = $8,000

The undiscounted cash inflows are calculated as follows:

Undiscounted Cash Inflows =  Cash Inflow during each year * Number of periods (years) of cash inflow

Undiscounted Cash Inflows = 7000 * 5 = $35,000

As a result, there will be an $8 000 difference between undiscounted cash inflows and outflows over the period of the machine's lifetime.

The undiscounted cash inflow is calculated by multiplying the period of cash inflows by the cash inflow for each period. The machine's acquisition price, or the undiscounted cash outflow, has been fixed at $27,000. The difference between the two is calculated by taking the cash outflow and subtracting it from the undiscounted cash inflows.

To know more about Capital Budgeting, refer to this link:

brainly.com/question/21598960

#SPJ4

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1 year ago
What's the biggest concern people have about mergers?
bija089 [108]

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ummmmmmmmmmm.......D

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