This website uses cookies to ensure you have the best experience. Learn more

Case Study Anacomp

1939 words - 8 pages

By Hanyu LIU 6260268

1. Identify all the economic entities involved in the development of Anacomp’s CIS software system.
The economic entities include Anacomp itself, a limited partnership RTS Associates, banks as co-developers- four CIS Primary Development Banks, and other banks contracted with Anacomp to provide loans or advisory services in the CIS project.

2. Describe the contractual arrangements between the economic entities involved in the CIS development. Who bears the majority of the risk of failure of the development effort? Who stands to gain most if the development effort succeeds? Are Anacomp’s shareholders better off or worse off with this ...view middle of the document...

The arrangement permitted each bank to review the project during development and provide input regarding changes to enhance the ultimate marketability of CIS.
RTS Associates bears the majority risk of failure of the development effort,because it has large investment into the development. But it can gain most if the effort succeeds. The buyback by Anacomp can turn into good profit.
Relative to in-house development of the system, shareholders face less risk for the new software development for part of the risk and cost born by RTS. The limited partnership alternative buffers the financial risks involved. At the same time they gain less if the effort succeeds. On the whole, they are better off for the fewer risks.

3. What criteria will Anacomp’s management use in deciding on whether or not to buy back the CIS system from RTS Associates? Is Anacomp’s management likely to be unbiased in deciding on the timing and the price of the purchase? If not, what will be the direction of the bias?
Anacomp has the option to acquire all rights to the CIS system at the greater of its appraised fair market value or RTS’s investment plus a fixed profit. This may depend on the performance of CIS system in the market, whether it has a good prospect to profit and its market value.
However, it is not very likely for the management to be unbiased on the issues of time and price of the purchase. Several officers and directors of Anacomp were affiliated with the corporate general
partner of RTS, and were also investors in the limited partnership arrangement. The Chairman of the Board and President of Anacomp, and three other directors of Anacomp, were also directors and officers of the corporate general partner of RTS. The ownership interest of Anacomp’s officers and directors in the limited partnership amounted to 38.5% of the total. Although all officers and directors as a group owned 15.1 percent of Anacomp’s common stock, the managemnt may have incentives to purchase the CIS in a short time and at a higher price to get more money for themselves.

4. Describe how Anacomp accounts for the CIS development effort. How does this type of accounting compare with the accounting for in-house software development? What particular accounts will be affected differentially by the two development arrangements?
Anacomp organized and financed the CIS development in a unique manner which it developed CIS on behalf of RTS. Therefore, the accounting for the development would be different from that under the arrangment of in-house software development in several aspects: how Anacomp recognize the money financed to develop new software, how to record loans for the development, the revenue CIS brings and the position of CIS itself, etc. . In the new arrangement, Anacomp would receive development fee from RTS and regard that as Deferred CIS development cost in asset in balance sheet. The bank loans would be in the financial statement of RTS. After CIS is completed, it can...

Other Papers Like Case Study Anacomp

Jail Responsibilities Essay

589 words - 3 pages Jail Responsibilities Monique Priorello September 23, 2012 One of the main responsibilities of a jail is to give the officers the correct “Police Correspondence” courses. This is because these courses give the officers the effective basic training that they need to do things such as; Writing of Memoranda, Police Reports, and Civilian Letters. What needs to be done first is make sure that there are NO errors. This means in

Mgt330 Essay

638 words - 3 pages experience for the people who visit the stores and make perfect beverages. Within this paper I will - 2 - [no notes on this page]discuss and answer the four questions asked from the case student in Chapter three about Starbuck’s structure. The job description that I choose to explain is that of a Baristas. As a Baristas, a person will be the face of the company being that they are the first person seen when customers walk in. Delivering great

Fight Club

917 words - 4 pages Fight Club is a story of the narrator’s struggle to gain control over his life. He is in search for an identity in the form of manhood. His masculinity is so repressed because of the absence of a father figure in his life. Because of this he creates Tyler, his alternate personality. Tyler is nothing like anyone the narrator has met, he is self assured and completely free. The narrators alternate personality Tyler Durden is the ultimate alpha-male

The Powers Of The Health And Safety Representative

254 words - 2 pages The Powers of the Health and Safety Representative A health and safety representative has the power to: Identify Workplace Hazards The health and safety representative has the power to identify workplace hazards. This power is usually exercised by conducting workplace inspections. Obtain Information from the Employer The health and safety representative is entitled to the same information available to a joint committee member. Under the Act

Lesson Plan

6476 words - 26 pages QWERTYUIOP by Vivien Alcock Table of Contents Introduction About Short Stories The Writer Synopsis Elements Activities Beyond The Text Assessment Answer Key Glossary Panel of Writers [pic] SHORT STORY Welcome to the World of Literature and to Short Stories! We hope you will enjoy working with this guidebook, which has been specially designed to help you prepare your students enjoy the Literature


1227 words - 5 pages Coca-Cola Global Business and Marketing Strategy Introduction As domestic markets mature, it is becoming more and more fashionable for organisations to seek growth through opportunities in foreign countries. Faster communication, new technologies and improved transport links are making international markets more accessible and businesses pursuing a global position can experience an upsurge in brand awareness and cost effectiveness. Global

Facing Poverty With A Rich Girl's Habit

783 words - 4 pages Facing poverty with a rich girl’s habit Adele Strader Professor Chryst English Composition October 22, 2012 Facing poverty with a rich girl’s habit was written by Suki Kim and published in the New York Times on November 21, 2004. The most important point that Suki want to make was that (1) what we have in life can be taken away in an instant (2) do not go bankrupt in South Korea (3) that a person must adapt and endure

3-4-50 Paper

572 words - 3 pages -4-50 paperLack of exercise is a key contributor to disease and death among many people in the United States, regardless of age. It is a well-known fact that exercise results in a healthier lifestyle. Along with tobacco use and poor nutrition, lack of exercise is one of the main issues that people have which leads to high blood pressure, obesity, and other serious health problems. According to a study by UCSD School of Medicine and SDSU


836 words - 4 pages Miguel Beatrice Capitalism is an economic system in which private individuals and business firms carry out production and exchange of goods and services through complex transactions involved in prices and markets. By extension called capitalist higher social class of this economic system ("bourgeoisie"), or to the common form would the individual interests of capital owners in both companies, shareholders and patterns, also called capitalism


1177 words - 5 pages is negative: they’re seen as lazy, drug users, alcoholics, and worthless. This study recovers some of the homelessness perspective for an American audience through research, data, and an interview by a homeless person living in Georgia. This study will allow explanations and will challenge three widely held assumptions of the homeless people living in America: 1) Homeless people are lazy; 2) Homeless people are all drug and alcohol users and

Mental Health Community Service Essay

509 words - 3 pages Ladesca Smith Nursing 162 Community Volunteer Service Assignment Why you chose this agency? I chose this Sharing God’s Love, because I was interested in what kind of services they provide. I also wanted to know if there was any help out there for the people in need with mental illnesses. I also had lots of my kid’s old clothing that I needed to get rid of, so I donated it to them. Describe the population the agency serves. The

Related Essays

Lafarge S.A Essay

2924 words - 12 pages NAME: IHEKANANDU KINGSLEY N. COURSE: MGMT 292 / F12 N01 TITLE: INDIVIDUAL CASE STUDY (LAFARGE S.A.) SUBMITTED: October 5, 2012 TABLE OF CONTENTS 2. INTRODUCTION 3 3. DESCRIPTION OF CASE 4 4. VALUES 4 4.1. Types of values 4 5. TEAMWORK 7 6. MOTIVATION 8 7. CREATIVITY 9 7.1. Components of creativity 9 8. CONCLUSION 12 9. BIBLIOGRAPHY 13 INTRODUCTION This report aims to provide an in-depth analysis of initiatives pursued by Lafarge as

Finance Essay

665 words - 3 pages Financial statements are the most common tool used for making business decisions. They consist of the balance sheet, income statement and statement of cash flows. The analysis tools used affect all aspects of a company not just a few. A systematic review of the resources a company used to achieve its mission is cost control. Cash flow should be kept at necessary levels for operations is one of the major benefits of cost control. It is a very

Analysis Of Operation Blue Star And Its Effects On The Gandhi Dynasty

934 words - 4 pages The period of time including and following Operation Blue star is considered a dark time in India and black spot in Indian history. It is a time Indian would rather forget, yet still to this day debate about. Was Indihar Gandhi correct in instating operation Blue Star, inflicting damage to the Golden temple, and being responsible for the killing of anywhere from 492 (official reports) to 1500 (estimates run as high as) civilians, which lead to an

Regretful Decisions Essay

930 words - 4 pages Regretful Decisions There are many individuals in a child’s life that helps mold them into a well-rounded adult. In most cases, this guidance comes from the child’s parents or other older, but in Sonny’s case, this guidance was expected from his older brother. In the short narrative, Sonny’s Blues, Sonny’s life was adversely affected by the decisions that his older brother made. The decisions that his brother made include leaving Sonny to