This report presents an investment appraisal of a potential acquisition. It analyzes the financial position of Wholesome Organic Foods (WOF) through ratio analysis, assessing its liquidity, profitability, efficiency, and solvency. The core of the report focuses on evaluating the acquisition of Bonita Foods SL, applying capital budgeting techniques such as NPV, IRR, payback period, and ARR to determine the feasibility of the project. The methodology includes calculating WACC to derive discount rates and valuing the company. The results section provides insights into the project's payback period and NPV under different scenarios. The report also addresses financing methods and foreign exchange risks associated with the acquisition. The conclusion provides a recommendation on the maximum price WOF should pay, considering the financial analysis and potential impact of foreign exchange, providing an understanding of the financial viability of the acquisition.
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