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Austin Wen FINA4210 Final

Austin Wen FINA4210 Final - AustinWen FINA4210 Poulsen...

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Austin Wen FINA 4210  Poulsen Final Exam: Harvard Case 9-293-135: Friendly Cards  According to my NPV analysis, this envelope machine project has a $791,000  positive value to the company. However, this number is based on many assumptions such  as fixed cost of materials and labors. (See the NPV spreadsheet in my excel) Before I decided whether Ms. Beaumont should acquire Creative Designs, I  project Creative Designs’ income statement and balance sheet. The cost-cutting in COGS  and SGA that Ms. Beaumont estimates definitely makes a significant difference in both  statements. Moreover, it also lowers the level of bank loan and increases free cash flows. Based on the DCF analysis, my suggestion will be yes; Creative Designs is  undervalued. (See my DCF spreadsheet.) The DCF valuation (with 6% growth rate) gives  me a 4.2 million dollars estimation and the price the Creative Designs principals agreed 
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