[Seminar] Case Study 1 - COURSE INTERNATIONAL FINANCE...

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COURSE: INTERNATIONAL FINANCE MANAGEMENT (BWFF5043) Group B GROUP ASSIGNMENT: CASE STUDY: THE LAZY MOWER: IS IT REALLY WORTH IT? LECTURER: Prof. Madya Dr. Kamarun Nisham B Taufil Mohd PREPARED BY: ABDULLAHI () SITI KHADIJAH BINTI SALLEH () SRI NOOR ‘AISHAH BINTI MOHD SALLEH (821031)
BWFF6013: Seminar In Finance Case Study: The Lazy Mower: Is It Really Worth It? 2 Question 2 Use a scenario analysis to show how the cash flows would change if the sales forecasts were 15% worse (Pessimistic) and 15% better (Optimistic) than the stated forecast (base). Pessimistic (Worse 15%) Base Optimistic (Better 15%) NPV 36,149,035.64 46,162,736.36 56,176,437.07 IRR 0.517335355 = 51.73% 0.608058613 = 60.81% 0.696216613 = 69.62% Question 4 How should the annual interest expenses of $400,000 be treated? Explain. The annual interest expenses of the $400,000 will not be included in calculating the project’s cash flows. This is because it is a standard to assume that there is no debt financing when calculating a project’s cash flows (Rose et al., 2015). It is also a norm for

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