Project #53332 - analysis of a financial case study

This assignment consists of an individually prepared analysis of a financial case study.  At the end of term a comprehensive case will be assigned that will involve questions addressing the learning outcomes of the course.  Emphases are placed on the areas of valuation, techniques of financial analysis, cost of capital, free cash flow estimation, risk analysis, real options, and current financial issues.

(1)Prepare an executive summary to sum up analytical results and recommendation. (10%)

(2) Review the projections formulated by Liedtke. Are they appropriate? How would you recommend modifying them? (15%)

(3)  Estimate the present value and internal rate of return for the Mercury acquisition using a discounted cash flow approach and Liedtke’s base case projections. Clearly indicate and justify the values used for all relevant cost of capital calculations and defend any assumptions that you felt were necessary. (20%)

(4) Perform sensitivity analysis and other risk analysis you consider appropriate on key variables and assumptions of this investment. Identify the effect on NPV of deviations in key factors from those presented in the base case. Do you feel that these risks are acceptable? Under which conditions would you not proceed with this acquisition? (20%)

(5) Can you identify valuable synergies other than those identified by Liedtke? (15%)

(6) Can you identify any real options embedded in this acquisition? What information would you need to value these options? (10%)

(7) Should Active gear proceed with the acquisition? Be sure to discuss strategic as well as financial factors. (10%)

 

Materials that may be brought into the Case Write Up Session include: (a) a clean (non-annotated) copy of the Case; (b) financial calculator

Subject Business
Due By (Pacific Time) 01/10/2015 12:00 am
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