The project evaluation for an acquisition of a synthetic leather manufacturing plant : case study

Abstract

This case study is an applied research project which concerns on finding the financial viability of a company integration done by D Samson Industries (Pvt) Ltd. Company integrations are carried out with sensible and dubious reasons and identified variously based on the nature of the integration. This thesis explores the topic of company integrations and their financial implications by employing various financial evaluation techniques, namely Net Present Value (NPV), Internal Rate of Return (IRR), Payback Period, Sensitivity Analysis and Synergy benefits. The work has carried out a comprehensive financial analysis of selected integration project, considering factors such as initial investment costs, projected cash flows, and the time value of money. NPV calculations are employed to determine the present value of future cash flows, while IRR is used to assess the project's potential return on investment. Additionally, the payback period is analyzed to ascertain the length of time required to recover the initial investment and sensitivity analysis to determine the changes in NPV with the changes in key input variables. Calculations and discussions are completed with final synergy benefit calculation to wrap up the financial understanding of the company integration. This applied research project serves as a valuable resource for professionals involved in corporate finance, mergers and acquisitions, and strategic management, providing them with a comprehensive understanding of the financial implications of integration projects and providing practical insight and guidance for financial evaluation and aiding in the decision-making process.