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Table of Contents:

1. Outline

2. Abstract of Allied Food Product

3. Introduction of Case Study

OUTLINE:

I. Abstract

II. Introduction of the case study

A. Evaluation of project and recommendations all Illustrated on Table IC 12-1

1. Investment Outlay

2. Table of sales, sales price, total revenues & operating costs excluding depreciation

3. Depreciation data

4. Illustration of after tax operating income

5. Year 4, Terminal Cash Flow, Explanation of working capital

B. Explanation of debt usage in Capital Structure

1. Explanation of projected Cash Flow

2. Explanation of spending $50,000 for renovation

3. Explanation of earning 25,000 annually for lease of building

4. Analysis of sales utilization of the lemon Juice project taken from Orange Juice business

C. Disregarding Explanations of part B, Calculations illustrating: NPV, IRR, MIRR

And Payback period.

D. Analysis of project being replacement rather than expansion

E. Issues concerning project risk

1. Three levels or types of project risk

2. Most relevant type of project risk

3. Easiest type of project risk to measure

4. Three types of risk highly correlated

F. 1.Sensitivity Analysis

2. Detailed explanation of the performance of sensitivity analysis on the unit sales, salvage value and WACC,

3. Primary advantages and disadvantages of sensitivity analysis

G. The unrelated project of Allied and illustration of mutually exclusivity

1. The replacement chain Method(NPV)

2. The EAA method

H. Inflation with Average 5% and WACC

I. Table IC 12-2, Lemon Juice project Cash flow with inflation of 5% and Allied’s WACC at 10%

I.1. Worst and best case of NPV

I.2. Possibilities of risk level involving Lemon Juice project and expected NPV, Standard deviation and Coefficient of Variance

J. Application of Allied Coefficient of Variance and classification of risk level

K. Correlation of...