mercury athletic case
(1)Prepare an
executive summary to sum up analytical results and recommendation. (10%)
(2) Review the projections formulated by
Liedtke. Are they appropriate? How would you recommend modifying them? (15%)
(3) Estimate the present value and internal rate
of return for the Mercury acquisition using a discounted cash flow approach and
Liedtkeâs base case projections. Clearly indicate and justify the values used
for all relevant cost of capital calculations and defend any assumptions that
you felt were necessary. (20%)
(4) Perform
sensitivity analysis and other risk analysis you consider appropriate on key
variables and assumptions of this investment. Identify the effect on NPV of
deviations in key factors from those presented in the base case. Do you feel
that these risks are acceptable? Under which conditions would you not proceed
with this acquisition? (20%)
(5) Can you
identify valuable synergies other than those identified by Liedtke? (15%)
(6) Can you
identify any real options embedded in this acquisition? What information would
you need to value these options? (10%)
(7) Should Active
gear proceed with the acquisition? Be sure to discuss strategic as well as
financial factors. (10%)
