1 Produce A Projected Capital Budgeting Cash Flows Statement For Sneaker 2013 Projec 2914110

1. Produce a projected capital budgeting cash flows statement for Sneaker 2013 project by answering the following:
a. What is the project’s initial (year 0) investment outlay? b. What are the project’s annual (year 2013-2018) net operating cash flows? c. What is the project’s terminal (2018) non-operating net cash flow? d. Does Sneaker 2013 appear viable from a quantitative standpoint? (To answer this question, estimate the project’s payback, net present value, and internal rate of return)
2. Produce a projected capital budgeting cash flow statement for Persistence project by answering the following:
a. What is the project’s initial (year 0) investment outlay? b. What are the project’s annual (year 2013-2018) net operating cash flows? c. What is the project’s terminal (2018) non-operating net cash flow? d. Does Persistence appear attractive from a quantitative standpoint? (To answer this question, estimate the project’s payback, net present value, and internal rate of return)
3. Between the two projects, which project do you think is more risky? How do you think you should incorporate differences in risk in your analysis?
4. Based on the calculated payback period, net present value (NPV) and internal rate of return (IRR) for each project, which project looks better for New Balance shareholders? Why?
5. Should Rodriguez be more critical or less critical of cash flow forecasts for Persistence than of cash flow forecasts for Sneaker 2013? Why?
6. What is your final recommendation to Rodriguez?

 

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