The operations’ vice-president must present an evaluation and proposed strategy in order to develop his utility to cater to the increased saleto be experienced in the coming three years.Students must comprehend the methodology for capital distribution in this large company to be able to propose relevant strategies that may be adopted, as well as understand and finish a discounted cash flow.
Evaluation of Expansion Project at Laurentian Bakery
Net Cash Flows, NPV Calculations, IRR, Tax and Inflation Assumptions
Working 1: Calculation of Profit from Additional Sales
Working 2: Calculation of Additional Working Capital Needs
Working 3: Calculation of Company WACC
Retunrn on Equity, Risk-free Rate, Beta, Market Risk Premium
Return on Debt, WACC
Assess the capital allocation policy at Laurentian Bakeries.
Calculate the project’s cost of capital.
Calculate the project’s net present value.
As Danielle Knowles, what recommendation would you make concerning the Winnipeg plant expansion, and why?