1. What are the incremental FCF for Project Atlantic" that is being proposed by Whirlpool for years 1999-2007?
2. What is the NPV of Project Atlantic without the terminal value?
3. What is the NPV of Project Atlantic with the terminal value?
4. According to your analysis should Whirlpool undertake Project Atlantic? What if it does not get the terminal value?

Exhibit 2B Wave Implementation Schedule
	West	South	Central	North
Start Date:	MAY 1999	MAY 2000	MAR 2001	JAN 2002
End Date:	APR 2000	FEB 2001	DEC 2001	AUG 2002

Exhibit 3 1997 Data for Whirlpool Europe
Wave	DSI	Product Availability	Units Sold	Revenue (000s US$)	Margin (000s US$)
West	45	73.5%	2,271,139	477,784	58,859
South	51	83.1%	1,415,949	283,549	46,241
Central	67	76.8%	977,665	185,625	43,678
North	55	83.2%	1,443,156	280,901	29,818

Exhibit 4 Improvements in DSI and Availability by Year and Wave
	Improvements by Year by Wave
Wave	2000	2001	2002	2003	2004	2005
West	25%	40%	35%
South		35%	40%	25%
Central			40%	40%	20%
North				40%	40%	20%

Exhibit 5 Margin Improvements by Year by Wave
	Cumulative Margin Improvements by Year by Wave
Wave	2000	2001	2002	2003	2004	2005
West	0.06%	0.25%	0.25%	0.25%	0.25%	0.25%
South		0.10%	0.25%	0.25%	0.25%	0.25%
Central			0.13%	0.25%	0.25%	0.25%
North				0.13%	0.25%	0.25%

Exhibit 6 Forecasted Other Expense Savings by Year (000s US$)
	2000	2001	2002	2003	2004	2005	2006	2007
Order Desk Headcount	0	190	411	442	474	506	537	569
Finance Headcount	81	135	216	324	405	405	405	405
Warehouse Space	18	72	155	230	274	288	288	288
Bad Debt Expense	102	512	922	1,024	1,024	1,024	1,024	1,024
Information Systems	420	840	840	1,280	1,280	1,280	1,280	1,280
	621	1,749	2,544	3,300	3,457	3,503	3,534	3,566

		1999	2000	2001	2002	2003	2004	2005	2006	2007
Capital equipment		4300	8600	6900	4100
Software licenses		600	300
Capital expenditures		4900	8900	6900	4100
Depreciation
1999 assets	SL 5 years		980	980	980	980	980
2000 assets	SL 5 years			1780	1780	1780	1780	1780
2001 assets	SL 5 years				1380	1380	1380	1380	1380
2002 assets	SL 5 years					820	820	820	820	820
Incremental Depreciation			980	2760	4140	4960	4960	3980	2200	820

Operation Expense

rate

1999

2000

2001

2002

2003

2004

2005

2006

2007

Employees

50

50

50

50

Employees salary

45

2250

2250

2250

2250

Consultants

19

9

7

4

Consultants salary (annual)

184.8

3511.2

1663.2

1293.6

739.2

Task force

300

600

600

600

300

On going operational

600

1200

1800

2400

3000

3000

3000

3000

3000

License maintenance

100

200

300

400

400

400

400

400

Implementation Costs

6361.2

5513.2

6143.6

6289.2

4000

3700

3400

3400

3400

Other expense savings

EX 6

621

1749

2544

3300

3457

3503

3534

3566

Incremental Operating Expenses

6361.2

4892.2

4394.6

3745.2

700

243

-103

-134

-166

DCF

		0	1	2	3	4	5	6	7	8
Year		1999	2000	2001	2002	2003	2004	2005	2006	2007
Revenue									0	0	<-don’'t change this stuff
COGS									0	0
Operating Expense
Depreciation
EBIT
Taxes	40%
EBITAT
Cash flow adjustments
+ depreciation
- CAPX
- working capital investment
Cash Flow
Discount Factor	9%
Discounted cash flow
Terminal value	3%									0
Sum of discounted cash flow		0
PV(Terminal value)		0
NPV		0

Answer rating: 100% (QA)

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