Reference no: EM132173256
Assignment: Case Study - Canada Hardware
It is January 1st, 2018. You are a Senior Analyst at Canada Hardware Inc. (CHI), one of the top hardware, sports, and apparel providers in Canada with hundreds of stores across Canada. The CEO of Canada Hardware, Tony Stark, has reached out to you to draft a report to evaluate two investment proposals, building on your analysis from Assignment 1.
Purpose
For this case approach, you will demonstrate your ability to develop costing methods and a set of forecasts of future cash flows for two proposed investment projects. You will also be required to identify the cost of financing through the issuance of bonds.
How to Proceed
Building on your analysis and proposal from Assignment 1, develop your investment proposal business case draft:
1. Create a title page with the project proposal names and author identification.
2. Calculate the bond yield to utilize as your required return.
3. Prepare a summary narrative (i.e., a detailed description) of each proposal with detailed elements on the initial investment, as well as the costs/revenues over the life of each of the projects. Identify which revenues and costs are relevant to your analysis, and which costs are irrelevant. Identify the time horizon for each investment.
4. Calculate the after-tax cash flows during the life of each of the projects. Be sure to identify the total costs of ownership and deduct those costs from the benefits to arrive at the net cash inflow per year.
5. Utilizing the after-tax cash flows from Part 4, evaluate each investment proposal utilizing the following criteria (unless directed otherwise):
a. IRR
b. Payback;
c. Discounted payback;
d. NPV;
e. Profitability index.
6. Clearly indicate whether any of the above criteria support each of the project proposals, and what the company should ultimately decide to do.
Format for Submission
Your report narratives may be done in Word or Excel, but calculations and tables of values must be prepared in Excel with the amounts derived from actual formulas that use your variables, rounded to four (4) decimals or lower.
The Excel tab worksheet must be print and presentation ready, formatted to print in 2 to 3 pages without page fragmentation of equations or tables between pages.
Attachment:- Canada Hardware Case Study.rar