Bernard Lester ScenarioLester Electronics, Inc., a distribution company in the United States, and has a contract with Shang-wa Electronics, a Korean manufacturer of capacitors. Under the contract, which must be renewed annually, Shang-wa granted Lester the exclusive right to sell capacitors in the United States for 65 years, as long as Lester maintained a minimum annual purchase of $1 million wholesale; as result, Shang-wa is Lester's primary supplier of capacitors for the U.S. market. In exchange, Shang-wa cannot knowingly sell its capacitors to anyone intending to market to U.S. buyers. Lester added additional components to its product line. Shang-wa's capacitors are well known in the U.S. market that is why Transnational Electronics Corporation, a large manufacturer and distributor of electronics components wants to acquire Shang-wa. On the other hand, Avral Electronics equipment and component parts manufacturer headquartered in Paris wants to acquire Lester, because they want to market their product in the U.S.
market (UOP, 2007).
What is Financial Planning?Financial planning is the method in which the financial goals of the company are to be achieved. There are two dimensions the first of which there is a timeframe and the second is the level aggregation. The financial plan is a statement that is to be completed in the future (Ross-Westerfield, 2004). Financial plans are put together from the capital budgeting analyses of each of the firm's projects. A financial planning process will require each division to prepare three alternative business plans for the next three years (Ross-Westerfield, 2004).
In order for Bernard and John to make an appropriate decision they must both look at the following information. This information will assist them at making the appropriate decision.
Which is the financial plan for the companies, the two companies must look at the sales forecast. A perfect sales forecast is...