Question: 1. What are the issues in this case? In what order should Andy Chin and Adeline Koh address them? 2. Should Koh approve the packaging

1. What are the issues in this case? In what order should Andy Chin and Adeline Koh address them?

2. Should Koh approve the packaging machine investment? How did you analyze this issue?

In July 2001, a new chief executive officer (CEO) joins this small manufacturer of CD-ROMs and DVDs to discover that the firm is in the midst of a financial crisis that was induced by rapid growth. The CEO asks an analyst for help with five tasks:

Review the historical performance of the firm
Forecast financing requirements for the next two years
Exercise the forecasting model to identify key driver assumptions
Estimate Star River’s weighted-average cost of capital
Analyze a proposed investment in a packaging machine

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