Question: Level 1, Blue Bell Industries; Just the basic stuff Monday morning at Blue Bell Industries. After poured yourself a cup of coffee and had a
| Level 1, Blue Bell Industries; Just the basic stuff | ||||||||
| Monday morning at Blue Bell Industries. | ||||||||
| After poured yourself a cup of coffee and had a chat with your peers in the executive lounge | ||||||||
| you arrived at your office. On the desk you found a handwritten note from your CEO with a | ||||||||
| simple comment: "To be presented at todays meeting at 10:30AM". | ||||||||
| The case is rather straightforward as a simple guideline is needed ahead of entering into | ||||||||
| the business area of container handling at ports. The CEO notes that he assumes that | ||||||||
| a risk premium needs to be considered at +5% for low level of risk, +7% at medium and | ||||||||
| +9% at high level of risk. The time horizon to be considered would be 10 years. | ||||||||
| You are already aware that the initial investment would be GBP 200m and the expected | ||||||||
| cash flow is expected at 36m annually. The risk free rate is set at 5% | ||||||||
| Present what you will bring with you to the meeting and provide detailed calculations. | ||||||||
| You also consider to inform your peer at the meeting about what advantages there | ||||||||
| are using sensitivity analysis. What would that be? | ||||||||
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