Introduction:

Competition Bikes Inc. is considering an expansion to Canada and is trying to determine whether to merge with or acquire the Canadian Biking Inc. facility. Part of the consideration in the decision to merge with Canadian Biking, Inc. or to acquire Canadian Biking is the source and management of the working capital for the operation. In this task, you will prepare a summary report that analyzes the proposed expansion.

Task:

Note: Be sure to submit a copy of your Excel workbook when submitting your JET2 Task 3 work.  The evaluator will need a copy of your data to ensure correct evaluation.

A.  Prepare a summary report in which you do the following:
1.  Recommend a capital structure approach that maximizes shareholder return.
a.  Justify your recommendation.
2.  Discuss capital budget areas that raise concern.

Note: In your comments be sure to address your findings related to Net Present Value and Internal Rate of Return.

3.  Discuss how working capital can be properly obtained and managed for the Canadian expansion.
4.  Discuss whether Competition Bikes Inc. should merge with or acquire the Canadian Biking Inc. facility.

B.  If you use sources, include all in-text citations and references in APA format.