Motkamills Company’s Reorganization Report

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Motkamills Company is in a very competitive market. The expected changes would affect very many areas of the organization. There is a need to restructure and reorganize the company’s leadership so that the expected changes can lead to growth.

Motkamills can expand its already established products in the market while at the same time, make energy investment (Gwynne & Kay 2014). It would not be advisable for the firm to allow any pollution. Motkamills would have to rely on strong and dynamic management to ensure that there is strict adherence to strategy. It would help the company to increase its productivity while cutting down on consumption.

The Discounted Cash Flow is a valuation approach that Motkamills can use to account for the time value of money (Räthzel & Uzzell 2013). The approach puts emphasis on the long-term projects by projecting the cost of investment versus the expected returns from the investment at a discounted rate. During the calculations, the cost of equity financing and debt financing can be a single rate. The calculations for the DCF valuation approach takes into account the cash flows, payment of taxes, working capital and depreciation (Koenig 2011).

Sensitivity analysis concerns the changes to individual independent model variables and their effects on the dependent variables. Motkamills can use the Uncertainty analysis as a probability technique that characterizes the risk in the model inputs and the resulting risk in the model output. It can be important in quantifying the range of potential values that an input variable could have and weight them by their probabilities of occurrence. Motkamills should use the Payback period approach because it considers how long it takes the investments to break even or cover costs (Products: Pfizer.com 2015).

\There is normally a comparison between the expected costs to the expected returns. At Motkamills, the sensitivity analysis would focus on the input variables and their corresponding variables in the output. The lower sensitivity input variables would result from small input variables that produce small changes in the output variables. The main objective would be to identify those input variables that result in highly sensitive results.

The Monte Carlo simulation is the random generation of inputs in a model that enables the effect analysis of varying inputs on outputs. It allows the use of spreadsheets on a desktop and can create many models at once. It solves the problem of deterministic models because of its independence. Motkamills can use the computerized mathematics approach that would allow it to account for risk in quantitative analysis and decision-making. A real option is an approach that solves the problems of DCF. Real option examines the flexibility in management and does not only use the investment option as an investment valuation. Real options can be important in both energy-related investments and capital investments of Motkamills (Norton 2012).

Motkamills would use the payback period’s time value of money to gauge the break-even analysis. The longer the project investment would take to start making the profit, the lesser it would become important to investors. Projects that take a shorter time to gain back their cost of investments are attractive to investors. They also allow the company and the investors to plan for other projects and or programs in time. The shorter the payback period, the more valuable the project becomes.

References

Gwynne, R & Kay, C 2014, Latin America transformed, Hodder Education, London.

Koenig, A 2011, “Are leader stereotypes masculine? A meta-analysis of three research paradigms,” Psychological Bulletin, vol 137, no. 4, pp. 616-642.

Norton, M 2012, Sustainability, Routledge, London.

. 2015. Web.

Räthzel, N & Uzzell, D 2013, Trade unions in the green economy, Routledge, New York.

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