Reference no: EM131033332

Harvard Business Publishing "Mountain Man Brewing company: Bringing the brand to light". Write a 1-page proposal to your management conveying why you think it is important to launch Mountain Man Light beer. Include qualitative comments, current market scenario etc. Discuss your assumption, and provide annexure for supporting calculations discussing salient conclusions on NPV for different scenarios. This question expects you to build an excel worksheet (develop appropriate formulae for different cells etc.) based on information available in the case. A starter worksheet (with some formulae and a cost of capital of 10%) is available on blackboard. Support your proposal with numbers and any persuasive calculations you deem necessary and these would feature as an annexure to your one-page proposal. Please include a worksheet developing the starter worksheet as necessary indicating the cash flows and Net Present Value for three scenarios (see below) clearly stating your assumptions for the launch for full credit. (7.5-points) Note: Your board has informed you that the cost of capital would be set at 10% for all proposal evaluations. • scenario 1- you will recover the incremental costs associated with the launch • scenario 2- in addition to incremental costs you will also recover loss of contribution due to current business going down • scenario 3 - After discussions on the two scenarios you present, your board remains inflexible and insists that a cannibalization rate of 15% will need to be considered. However, it will allow you increases in market share of .5% every year, starting the year 1 at .25% but is not convinced that such market share increase is attainable without a concomitant increase in advertising. The board is agreeable to an annual advertisement equivalent to the launch advertisement ($750,000) every year up to and including year 5. However, it will do so only if the previously presented scenario 2 under these circumstances turns Cumulative NPV positive by year 5. Explore and determine if this is viable. Support your answer with the revised worksheet in a different tab.