Big B Coffee Shop - Big B Coffee Shop (1) Provided...

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Big B Coffee Shop (1) Provided Workbook: CB123 Relevant Readings:"Discounted Cash Flow Modeling" folder + Textbook Chapter 7. Individual assignment (Identify yourself in the "ID" worksheet). Consider Big B Coffee Shop from the previous homework (see provided Workbook). Big B now realizes that some of the assumptions made are not totally correct. For example, even though projected decrease in operating expenses is $8,805, past experience from other users indicates that operating expenses can vary significantly from year to year. Big B's CFO has come to the conclusion that decrease in operating expenses will most likely follow a normal distribution with a mean of $8,805 and a standard deviation of $500. A discount on the purchase price of the new machine can be negotiated. Most likely, the discount will follow a uniform distribution with a minimum of $1,000 and a maximum of $5,000. Finally, the weighted average cost of capital is expected to vary on a yearly basis following a lognormal distribution with a mean of 7% and a standard deviation
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Big B Coffee Shop - Big B Coffee Shop (1) Provided...

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