Ford Motor Company

Ford Motor Company

Introduction

In today's competitive business world, when a business takes initiative to develop a new product or service it evaluates the profitability of that project. Valuation in business plays important role. It helps the owner of the business in various ways such as it helps them in commencing the process of sales, resolving disputes of shareholders, it helps in future decision making and planning of business, it helps in identifying the tax obligation of business, it also helps in taking external source of funding, and it is useful for litigation purposes. There are numerous methods for valuation in business projects. In this report, project is evaluated for Ford Motor Company. Later in this report includes various source of financing that is available for the business. Interest rate offered on loan to such business is also analyzed. In the end of the report various source of finance will analyzed and appropriate on is recommended for the business.

Discussion

Business continues on developing new products and services. To analyze their benefit, valuation of such product or service is done before startup. If the proposed product or service proves benefits for the company than business start operation of that product or service. Therefore it can be said that valuation of business product and service proposal carries importance for future benefit of the company. In addition to this business need financing for launch of new product or service. There are various source of financing for businesses. These sources may include creditors, bank loans, suppliers or customers etc. Each source of finance is associated with certain cost and limitations. However, by choosing best option for business, it helps in expanding the business and reducing cost of borrowing. In this case product proposal is analyzed and various sources of financing are evaluated that are suitable for the Ford Motor Company.

Ford Motor Company

In 1903, Ford Motor Company started producing model “A” cars. First car was sold on 15th of July 1903. Ford motors acquired Lincoln brand in 1921. Ford played a major role in different areas such as NASA mission to moon, manufacturing of boats in World War I and played a role in World War II (Ford Motor Company, 2013a).

Ford has achieved various goals through it production line by production popular vehicles in history. Vehicles such as Model “A”, in 1949, Ford changed the design of cars which won Fashion Academy Award for Styling. Ford also introduced several cars for several U.S. presidents and by introducing Ford Mustang series which became favorite for U.S. (Ford Motor Company, 2013a).

Now, Ford is producing different models according to the regions but few models of Ford have a global recognition. Popular models include Ford Focus, Fiesta and Ford Shelby GT500 (Ford Motor Company, 2013b).

Rate of return on risk free assets

Risk free assets are referred to an asset which is having definite return in future. Commonly risk free assets are considered as treasuries most specifically T-bills because these treasuries are backed by the government of United ...