100%(1)1 out of 1 people found this document helpful
This preview shows page 1 - 3 out of 5 pages.
COURSE: INTERNATIONAL FINANCEMANAGEMENT (BWFF5043)Group BGROUP ASSIGNMENT:CASE STUDY: THE LAZY MOWER: IS IT REALLY WORTH IT?LECTURER:Prof. Madya Dr. Kamarun Nisham B Taufil MohdPREPARED BY:ABDULLAHI ()SITI KHADIJAH BINTI SALLEH ()SRI NOOR ‘AISHAH BINTI MOHD SALLEH (821031)
BWFF6013: Seminar In FinanceCase Study: The Lazy Mower: Is It Really Worth It?2Question 2Use 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%)BaseOptimistic(Better 15%)NPV36,149,035.6446,162,736.3656,176,437.07IRR0.517335355= 51.73%0.608058613= 60.81%0.696216613= 69.62%Question 4How 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 theproject’s cash flows. This is because it is a standard to assume that there is no debtfinancing when calculating a project’s cash flows (Rose et al., 2015). It is also a norm for