Tasty Foods Corporation Worksheet

CASE13CM | | Student Version | | 9/21/96 | | | | | | | | HEAVENLY FOODS CORPORATION | Capital Budgeting Methods, Cash Flow Estimation, and Risk Analysis | | | | | | | | This case combines capital budgeting decision methods, cash flow estimation, and risk analysis | | | | | which are presented in Cases 12I and 13I. In addition, the case focuses on quantifying the | | | | | strategic option value of developing the new line of lite frozen pizzas. | | | | | | | | | | | | | | | | | | | | The model develops incremental cash flow estimates, then calculates NPV, IRR, MIRR, ARR, and | | | | | payback for the lite athletic drink project. Also, this model contains a graph which can be used to | | | | | plot the sensitivity diagrams. You can change the data tables, then use them to change the graph. | | | | | Click on the tab labelled 'HEAVENLY ' to view the graph. In addition, the option value of the lite | | | | | pizza project is determined. If you are using the student version of the model, some of the cells have | | | | | been blanked out. Before using the model, it is necessary to fill in the empty cells with the | | | | | appropriate formulas. Once this is done, the model is ready for use. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | The following cells have been blanked out: | | | | | | C71, E72, F74:F75, G75, D86, E92, D95, G98:G99, | | | | | | D101, G104, G107, C114, F117, and D129. | | | | | | = | = | = | = | = | = | | INPUT DATA: | | | | KEY OUTPUT: | | | Initial Investment: | | | | | | | Equipment cost | | ##### | | NPV | ###### | | Freight | | ##### | | IRR | 0.0% | | Installation | | ##### | | MIRR | 7.2% | | Change in NWC | | ##### | | ARR | 17.4% | | Operating Flows and Inflation Rates: | | | |