To Fly Plastic & Steel Co., Ltd. To Expand The Project Investment And Financing Decisions

The original motivation to establis and develop an enterprise is to pursuit profit．As a profit-seeking enterprise,the goal of its mamagement is to survive,develop and make profits．The opportunity and threat produced by the harsh competition are in front of the enterprises and they should search for good projects to invest．Whether the selection of project is successful directly affects the survival of the enterprise．The investment project should make profit for the enterprise and can increase the owner's equity and enterprise's value．All of these eventually are reflected by the related financial indes．This article analyses the decision-making of the Chengdu Aircraft Company's (CAC)expanding project of CAC's plastic-steel from the investment and financing aspects．Part One : Firstly, the article briefly introduces the CAC group,its membership enterprise-CAC Plastic-steel Company and the plastic-steel expending project,then the purposes of this case analysis and the procedure of related investment and finanncing decision-making．The purposes of this case analysis are : to reasonably plan the collection and disbursement of the project fund,reduce the financing cost,avoid the capital waste,reflect the profit status and provid basis for decision-making．After discussing how the financing influences the investment decision-making,thc following financing and investment decision-making steps should be taken:①forcasting the after-taxed cash NCF;②making financing decision-making;③calculating the after-adjustable NPV; ④evaluating the risk of the project．Part Two:On the basis of analysis of the technological feasibility of the project,the author analyses the demands and supply trend of future development．Lastly the analysis and forecasr are made according to the current market sales and future product structure．Part Three:Using the concept of cash flow,this part analyses the future cash afflux and cash disburse which will be brought by the expanding project．Then it calculates the future yearly capital requirement and the cash flow list of this project．Part Four:On the basis of analyzing the optimum capital structure,the financing decision-making analysis is made according to the future capital repuirement and the cash flow．It integrates the lowest repuirement on investment return rate,the available channel of collecting money and the capital occupied cost．And then makes out the amount and time list of the collection．Part Five:This section firstly calculates three finance indexes of the project:the static investment reclaim period,the NPV and the IRR．Then discusses the finance feasibility through the analysis of these indexes．Part Six:In order to reflect the risk of the project investment,sensitive factors which inflect the furure return are analyzed under two assumptions．Namely the price of future product and quantity will decrease separately 10%．then reminds the enterpriseto pay attention to thess changes．Part Seven : According to the result of the project investment and financing decision-making,the authorprovides the personal suggestions pointing to the related factors which influence the future return．At last the project loan plan list and capital-drawing list are set down．The major features of the paper lie in the innovated methodology,that is,accounting,corporate-finance,marking,strategic-management,production and management is applied to the decision-making.