question archive Murphy Stores The mid-term exam will be carried out in a similar structure to other group cases
Murphy Stores The mid-term exam will be carried out in a similar structure to other group cases
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Murphy Stores
The mid-term exam will be carried out in a similar structure to other group cases. However, you are to work on this case alone and not share notes with others. This case is checked for plagiarism.
You have been assigned a case study that will test your knowledge of computing 1. WACC and 2. Capital Budgeting Techniques (NPV, IRR, etc…). Make sure that you show all of your work in an excel document or word document. Your final solution will contain three documents, 1. A written report, 2. A case presentation, and 3. An excel/word document outlining your calculations.
Similar to other cases, your mid-term presentation case should have the following sections:
1. Case background
a. Here you should give an overview of the case. Discuss the background of the company. You do not need to be limited to only material discussed in the case.
2. Case Issues
a. Outline the issues you identify in the case.
3. Potential Solutions
a. Outline the solutions you are presenting the JC Penny. Give full explanations. Any necessary calculations need to be included in the written report.
4. Conclusion
a. A summary of your final recommendations
The written report (2-3 pages, no upper limit) should have (at minimum) the following sections:
1. Case background
2. Potential solutions to the case
3. Conclusion and final recommendations
4. Work Cited
5. Additional question responses
6. Index (Include all of your calculations here, no minimum requirement).
Project Deliverables (Should be submitted by the deadline):
1. A PowerPoint presentation presenting the primary issue and background of the case
2. A written case report detailing your solution to the case.
3. An excel/word document outlining your calculations
Instructions Specific to Murphy Stores
Murphy Stores (MS) is a case about a company facing an important decision, invest in theft reducing technology or energy-efficient lighting. Both bring benefits, and costs, to Murphy Stores. You will be confronted with several new issues that arise daily for a small business. Read the case, then open the case template and the attachment to the case to get a complete picture of the problem.
1. Using Exhibit 1, compute the appropriate WACC for MS.
2. Using the template provided, compute the NPV, IRR, MIRR, and payback period (including discount) for each option 1. EAS Full Line Stores, 2. EAS Hardware Stores, and 3. Lighting.
3. Based on the information in question 2, recommend what the firm should do, assuming all projects are mutually exclusive.
4. Last question, using the template, change the assumption for “Savings from Lighting” to a best-case of 40% and a worse case of 20%. Based on these changes, is the project profitable in all scenarios?
