Question: that's all I have. just ideas for the problems are needed. StopNFill's Gopher Project Stop Fill Inc. is an operator of gas stations in the


StopNFill's Gopher Project Stop Fill Inc. is an operator of gas stations in the Midwest. The company was founded about fifteen years ago in Nebraska. When the company needed capital to finance its expansion across state lines, the company went public. This means its stock is publicly traded on the New York Stock Exchange under the stock ticker symbol "STOP", where the stock is actively traded. So the shareholders are now widely dispersed across Nebraska, the U.S. and even across the globe. The company's current 80 gas stations are located in the Midwest with locations in towns of 2,000 residents or more. The towns are typically located on major state and federal highways in Nebraska, lowa and South Dakota. Besides the different types of gas the stations include convenience stores that sell pizza, chicken and subs as well as the other typical convenience store items. StopNFill has been successful in recent years. The company's same store sales are increasing at an annual rate of 6%. Its profit margins are holding steady at a good level in comparison to competitors. The company builds a few new gas stations each year. A large share of the financing for these gas stations comes from the reinvestment of prior year's earnings (retained earnings). In other words, earnings (profitset income) were not distributed to shareholders as dividends in prior years, but rather these cash distributions were omitted to save cash to build new gas stations. After years without dividends shareholders are starting to get anxious to see some cash inflows from their investments. The stock price has increased at a rate of 12%. The company is considering an aggressive new strategy to increase market share by expanding its operations into Minnesota. The strategy would require a much larger investment of cash than the company has spent in previous years on the building of new gas stations and current year's earnings would not provide nearly enough cash to finance this expansion. The company has identified twenty towns in southern and central Minnesota that fit the profile of its typical market. It is considering building a station in each of these towns as well as a new state-of-the-art distribution center to supply to stores in the Minnesota region. This investment could set StopNFill on the path of becoming a major player in the four state region. However, on the downside, a bad investment of this size could be a major blow to the company and threaten its future. You are a member of the Gopher Project Team stationed at the corporate headquarters in Fremont, Nebraska. This project is an opportunity for you to move up in the company. The project team consists of the best professionals from the functional areas of Marketing, HR, Finance, Accounting, Purchasing, IT and Operations. The team's purpose is to assess the financial feasibility of expanding the company's reach into Minnesota. The Chief Financial Officer (CFO) upon formation of the Gopher Project Team immediately sent word with the finance representative on the team that "Financial feasibility should be considered first. Without sound financial management there would have been no StopNFill!" So here you are as a member of the Gopher Project Team with your first assignment to determine its financial feasibility. 3. a) Considering only the information above and current economic events (Yes, think and read a little about what's going on today.): What are your feelings about this project? Would you lean towards deciding to do this or not? Why (not)? b) Assume the company moved forward with the Gopher Project: What measures should be used to evaluate the project in the first 5 years following completion? How do you define the success of this project
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
