This case is suitable for undergraduate- or graduate-level students in the long-term investment or capital budgeting section of a managerial accounting course. It assumes a prior understanding of long-term investment decisions and capital budgeting and should not be used as an introduction to these topics. After working through the case and assignment questions, students will be able to evaluate an investment opportunity from a qualitative standpoint; forecast net operating cash inflows on a potential investment while incorporating taxes; analyze a potential long-term investment opportunity by properly calculating the net present value and internal rate of return and conducting a sensitivity analysis; perform benchmarking analysis using ratios; and assess credit feasibility.

capital budgeting; financial analysis; net present value analysis

Undergraduate/MBA

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