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FIN605: Financial Management
Case Instruction and Hints
–
Sneaker 2013
Dr. Dong Chen
Instruction
On a relative note, this case analysis and report are more
like a “large” homework exercise
than a “typical” case
project with more complicated structure and a range of choice of
parameters. In this case, you will use the capital budgeting techniques we learned in the
course (especially Session 4) to calculate the annual net cash flows for the Sneaker 2013
project that New Balance is considering to invest in (
You can ignore the analysis of the
Persistence project which is also included in the case material
). You will then calculate
the net present value (NPV) of the project and make recommendations based on that.
Your report should clearly demonstrate the estimated annual cash flows and briefly explain
how you arrive at those numbers. Your write-up should contain a brief discussion about
the role of cash flows in capital budgeting and why NPV should be the appropriate decision
making rule for this project.
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- Winter '20
- Revenue, Corporate Finance, Net Present Value, Generally Accepted Accounting Principles, Internal rate of return
