Whirlpool Europe
Autor: Maria Carolina Magalhães Fechas Momade • November 15, 2016 • Course Note • 269 Words (2 Pages) • 800 Views
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Case “Whirlpool Europe”
You should download the case following this link
https://cb.hbsp.harvard.edu/cbmp/pl/56490145/56490147/21662726de6b3d099c50531e53363892
Questions:
- Discuss the sources of cashflow benefits from investing in the enterprise resource planning (ERP) system. → working capital requirements, gross margin and other operating costs
- Calculate the relevant cashflows from this project. Please explain and justify your answer. → compute the P&L table
- Compute the NPV, the IRR and the payback of the project and discuss the results. → Positive NPV, IRR near 29%, Payback: 3,6 years
- Should this project be undertaken? Explain briefly the method you are using to support your decision. → yes, NPV is positive
- What is the most relevant source of cashflow benefits (from the ones indentified in the first question)? In other words, which one creates more value for the shareholder? → computations show that the margin is the most relevant source of cashflow benefit
- Present an additional sensitivity analysis to other key value drivers (maximum 2). → we have to compare the initial situation with two changes in the margin – the 1st one in a recession scenario and the 2nd one in a boom-period scenario
General guidelines for written assignments:
> Do not deliver just some non-transparent collection of exhibits (tables and figures) – always explain what you are doing.
> Number and name all your exhibits so that you can refer to them easily in the text.
> Always justify your assumptions and conclusions, comment on your results.
> Be concise – write to the point.
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