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SBM ITB MM7000 Financial Management Session: Capital Budgeting 5 June 2011

CASE PRESENTATION ASSIGNMENT Fonderia di Torino

Each group will need to prepare a 15-minute presentation for this case. Please focus on presenting the following issues in a concise bullet (point) format: 1. What steps (framework) have you taken to prepare your analysis? 2. Present the key parameters & explain how you derive them: initial outlay, discount rate to use, incremental cash flow projection, terminal value, other key assumptions, until you obtain the IRR / NPV figure. 3. How would an inflation of 3% p.a. affect the above calculations? 4. Present also the top three strategic/qualitative considerations that moststrongly affect your decision. 5. Present and justify your final recommendation should you (Francesca Cerini) proceed with the project? Why? NOTE: In your analysis, please assume that due to excellent maintenance, the existing semi-automated stamping machines still have remaining useful lives of 8 years. It is expected that each group member will actively contribute to the preparation and presentation of this case. Please start to prepare before class, but you will be given about 30 minutes discussion time -- prior to your presentations -- to finalize whatever you need for the presentation. All the best!

Percy Marimba

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