Question: Please show all work in the table below. click the link below to see the case. Thank You 1) Use the base case assumptions (pg.

Please show all work in the table below. clickPlease show all work in the table below. clickPlease show all work in the table below. click the link below to see the case. Thank You

1) Use the base case assumptions (pg. 4) as well as the information presented in the case to build a four-year discounted cash flow model for Advanced Seal given a 50% cannibalization rate for the Premium Product and a 15% cannibalization rate for the Basic Product. What are your NPV and IRR results? Please use the Basic Template from the excel file provided for the project.

2) Repeat (1) but instead use

a 55% cannibalization for the Premium Product and a 15% cannibalization rate for the Basic Product. Show your NPV and IRR results. a 60% cannibalization rate for the Premium Product and a 15% cannibalization rate for the Basic Product. Show your NPV and IRR results.

3) Use the model developed in (1) to test the implications of Christina Whitmans Proposal to Drive Revenue(pg. 5). Please also use a 50% cannibalization rate for the Premium Product and a 15% cannibalization rate for the Basic Product. Show your NPV and IRR results.

4) Repeat (3) but instead use

a 57.5% cannibalization rate for the Premium Product and a 15% cannibalization rate for the Basic Product. Show your NPV and IRR results.

a 65% cannibalization rate for the Premium Product and a 15% cannibalization rate for the Basic Product. Show your NPV and IRR results.

5) What do you think of Christina Whitmans Proposal to Drive Revenue?

6) Use the model developed in (1) to test the implications of Margaret Tans Proposal to Minimize Cannibalization (i.e. raising the price to $23 dollar and minimize the cannibalization rate to 45% - pg.6) Show your NPV and IRR results.

7) Summarize your results for part (1) to (6) using the summary of scenarios template provided in the excel file. Also, please recommend what PG should do?

THE PROCTER AND GAMBLE COMPANY: CREST WHITESTRIPS ADVANCED SEAL
Discounted Cash Flow Valuation
Assumptions
Advanced Seal Premium Product Basic Product
Per unit revenue and costs
Revenue
COGS
Gross profit
Cannibalization rate
Year 0 Year 1 Year 2 Year 3 Year 4
Volume
Adv Seal
Premium
Basic
Incremental
SGA expenses
Advertising (Adv Seal)
Foregone advertising (Prem + Basic)
Capital investment
Startup costs
Depreciation schedule
Net working capital turnover
Tax rate
Discount rate
Revenue
Adv Seal
Premium+Basic
Incremental revenue
Gross profit
Adv Seal
Premium+Basic
Incremental gross profit
Incremental advertising exp
SGA expenses
Depreciation
Incremental EBIT
Taxes
NOPAT
Net working capital
Net PPE
Free Cash Flow
NOPAT
+ Depreciation
- Capital expenditures
- Investment in NWC
Free cash flow
Discounted value
NPV
IRR

Please try this link thank you

https://webcourses.niu.edu/bbcswebdav/pid-4462195-dt-content-rid-30651623_2/courses/20168-FINA-607---DE1/Procter%20and%20Gamble%20Project.pdf

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!