For this case study, please read the Comprehensive Case Study 2: Murphy Stores; Capital Projects found within the Harvard Case supplement. Please complete the following questions assignment for this assignment.

1. Describe the two investment opportunities and why each of them has appeal for Murphy Stores.

2. Calculate the WACC for Murphy Stores and compare it with the 12% assumption the company has made for project submissions?

3. Evaluate the two EAS projects and the lighting proposal. Prepare and interpret a project analysis that includes NPV, IRR and Profitability Index calculations. As a starting point, you should assume: that the investments must be made upfront (at t=0) you can evaluate the cash flows at the end of each year (with a 10 year horizon) that only six months of benefits occur in year 1, because your investment at t=0 is installed in the first 6 months of year 1

4. What are the key value-drivers for each of these projects (which variables have the greatest impact on the investment evaluation)? Do sensitivity analysis to verify your answer and analyze the best case and worst case scenario for each of the cases.

5. Compare your sensitivity cases with the base case (#3 above). Do these outcomes impact your recommendations on your recommendation?

6. What do you recommend that Murphy do? Think carefully about how to get the most value for Murphys limited capital dollars