Pontrelli Recycling
Pontrelli Recycling
Sara Doyle, Kevin Jackson, and Ali Lakhani
FIN/575
Michael Plesko
January 20, 2014
Pontrelli Recycling
Pontrelli Recycling, Inc. has a mission to “increase the efficiency of recycling usable materials in order to create a better environment for all,” and to “create value and a fair return on investment for shareholders” (Callahan, Stetz, and Brooks, 2007). A project must always be aligned with the company’s strategy and financial goals. When devising any new project, a company can refer to many available resources for the information needed for the plan by reviewing financial sheets and documents. In the upcoming project for Pontrelli Recycling the high level cost estimate for the project is $8.8 million. In the following project plan overview, the details of the project will be reviewed.
Debt and equity financing are two methods that may be employed by a company to obtain necessary capital for projects. Equity financing uses investors to obtain necessary funds. Equity financing does not have to be paid back like a loan and leaves more cash on hand for a company. While this method sounds appealing for those reasons, equity financing can lead to less control and ownership of a company, higher returns to be paid out to investors in the long run, and a longer financing process. Debt financing uses loans from banks or other financial institutions to acquire funds. By using debt financing, a company is able to maintain control and ownership of their company, use interest on the loan as a tax deductible, and plan for known repayment figures. Pontrelli Recycling can take advantage of the benefits of both of these methods for financing, and reduce their disadvantages by using both methods to fund their upcoming project. They can turn to investors for a portion of their financing and use banks for the other portion of financing.
One major part of creating a project proposal is being able to measure the value of the company. Pontrelli
Sara Doyle, Kevin Jackson, and Ali Lakhani
FIN/575
Michael Plesko
January 20, 2014
Pontrelli Recycling
Pontrelli Recycling, Inc. has a mission to “increase the efficiency of recycling usable materials in order to create a better environment for all,” and to “create value and a fair return on investment for shareholders” (Callahan, Stetz, and Brooks, 2007). A project must always be aligned with the company’s strategy and financial goals. When devising any new project, a company can refer to many available resources for the information needed for the plan by reviewing financial sheets and documents. In the upcoming project for Pontrelli Recycling the high level cost estimate for the project is $8.8 million. In the following project plan overview, the details of the project will be reviewed.
Debt and equity financing are two methods that may be employed by a company to obtain necessary capital for projects. Equity financing uses investors to obtain necessary funds. Equity financing does not have to be paid back like a loan and leaves more cash on hand for a company. While this method sounds appealing for those reasons, equity financing can lead to less control and ownership of a company, higher returns to be paid out to investors in the long run, and a longer financing process. Debt financing uses loans from banks or other financial institutions to acquire funds. By using debt financing, a company is able to maintain control and ownership of their company, use interest on the loan as a tax deductible, and plan for known repayment figures. Pontrelli Recycling can take advantage of the benefits of both of these methods for financing, and reduce their disadvantages by using both methods to fund their upcoming project. They can turn to investors for a portion of their financing and use banks for the other portion of financing.
One major part of creating a project proposal is being able to measure the value of the company. Pontrelli
References: Callahan, K.R., Stetz, G.S., & Brooks, L.M. (2007). Project Management Accounting:Budgeting, Tracking, and Reporting Cost and Profitability . Hoboken, N.J.: John Wiley & Sons, Inc. Eichenberger, J. (1998). Project management, part III budgets for projects. AAOHN Journal, 46(5), 268-70. Retrieved from http://search.proquest.com/docview/1013462577?accountid=35812 Hanks, G. (n.d.). Market Value Added Vs. Economic Value Added Chron.com. Retrieved January 18, 2014, from http://smallbusiness.chron.com/market-value-added-vs-economic-value-added-72854.html Titman, S., Keown, A.J., & Martin, J.D. (2011). Financial Management:Principles and Applications (11th ed.). Boston, M.A.: Prentice Hall