Hello

Hello

1. How has Aurora Textile performed over the past four years? Be prepared to provide financial ratios that present a clear picture of Aurora’s financial condition.

2. List the factors affecting the textile industry. What do you think is the state of the industry in the United States? How should you incorporate the state of the textile industry into your analysis? Why should anyone invest money in the industry?

3. What are the relevant cash flows for the Zinser investment? Using a 10% WACC and assuming a 36% tax rate, what do you get as the NPV for the project? What are the value drivers in your analysis? What do you estimate as the cost per pound for customer returns under the Zinser alternative? (Hint: for a replacement decision, analysts often find it helpful to prepare two sets of cash flows and two NPVs—one for the status quo and one for the new machine.)

3/5 – Conway – In-Class Case

Conway will be given, read, completed, and discussed in class. You do not need to prepare anything before coming to class.

3/7 – Worldwide Paper – In-Class Case

http://store.darden.virginia.edu/worldwide-paper-company

1. What yearly cash flows are relevant for this investment decision? Do not forget the effect of taxes and the initial investment amount.

2. What discount rate should Worldwide Paper Company (WPC) use to analyze those cash flows? Be prepared to justify your recommended rate and the assumptions that you used to estimate it.

3. What is the net present value (NPV) and internal rate of return (IRR) for the investment?

3/14 – Vesuvio Fonderia SPA – Presenting Team #3

http://store.darden.virginia.edu/vesuvio-fonderia-spa

1. Please assess the economic benefits of acquiring the Bond-O-Matic molding machine. What is the initial outlay? What are the benefits over time? What is an appropriate discount rate? Does the net present value (NPV) warrant the investment in the machine?

2. What uncertainties or qualitative considerations might...