The potential customer had estimated the savings to be realized by the new gear. Working with this estimate and financial advice about the client company, the sales representative must undertake a stringent capital budgeting analysis to help the job is sold by the prospective customer to the financial folks in the company.
The case provides pupils with a chance to assess a straightforward capital expenditure. Advice is provided about the chance of receiving the expected cash flows, so that expected NPV and IRR worth may be established. There's ample room for discussion about the costs of debt and equity to use the weights to be implemented. Also, the affect of expected inflation must be factored into the evaluation.
Publication Date: 03/06/2008
This is just an excerpt. This case is about Finance
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