• ILS as part of its global expansion strategy has acquired a warehouse and a truck fleet in the country. This is the first logistics operation that ILS has acquired in this country. A specific strategic objective is to obtain Walmart as a customer. Walmart currently uses ILS in other countries. 2 ILS recently acquired a warehouse in the country employing 50 warehouse employees and 50 drivers. ILS paid $400,000 for the business. In addition, ILS allocated $100,000 recognizing that the facility had a number of issues. ILS will form a project team working with existing employees to resolve the issues during Year 0. Given that the problems can be solved ILS expects to see a net cash flow (revenue – costs + depreciation add back) of $150,000 per year starting in Year 1. Assume a five-year investment life with a salvage value of $400,000 for continued earnings for year 6 and beyond. ILS plans to secure business from Walmart and other customers in the area surrounding the warehouse once the current issues are resolved. Attaining Walmart’s business is a strategic objective

• Propose a business case for the project.
  • Calculate the Net Present Value (NPV) for the project business case. (Use Microsoft Excel to derive the NPV assuming the data below—submit an Excel spreadsheet as an appendix:
    • Purchase price of $400,000.
    • One-time project costs total of $100,000 spent in Year 0.
    • Net benefits after taxes of $150,000 per year for five years.
    • Salvage value for Year 6 and beyond of $400,000.)
  • Summarize your results of NPV in the paper and refer to the Appendix.
• Develop a milestone schedule that includes five to seven elements
  • Use the case study to derive the milestones. If the case is lacking, feel free to include a solution or milestone that you think Walmart would value.

Answer rating: 100% (QA)

Business Case for ILS Warehouse and Truck Fleet Acquisition Executive Summary ILS has acquired a warehouse and truck fleet in a new country as part of its global expansion strategy This business case ... View the full answer