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243175185 Hansson Private Label Inc Evaluating an Investment in Expansion Case Solutions

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http://www.casetutors.com/12175/Hansson- Private-Label,-Inc.:-Evaluating-an-Investment-in- Expansion.html Hansson Private Label, Inc.: Evaluating an Investment in Expansion Case ID - 4021 Solution ID - 12175 2120 Words Abstract Hansson Private Label (HPL) is a manufacturer of personal care products such as shampoo soap mouthwash sunscreen and shaving cream. The company started in 1992 when it purchased assets from Simon Health and Beauty Products. The com
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  http://www.casetutors.com/12175/Hansson-Private-Label,-Inc.:-Evaluating-an-Investment-in-Expansion.html Hansson Private Label, Inc.: Evaluating an Investment in Expansion Case ID  - 4021 Solution ID  - 12175 2120 Words    Abstract Hansson Private Label (HPL) is a manufacturer of personal care products such as shampoo soap mouthwash sunscreen and shaving cream. The company started in 1992 when it purchased assets from Simon Health and Beauty Products. The company was purchased by Mr Hanson for $42 million $17 million of which was raised through debt financing. The investment represented significant risk for Hanson because a significant portion of his wealth was tied up is a single investment. However Hanson considered it an attractive investment because he believed that he was paying significantly less than the replacement cost of the assets purchased. Over the past sixteen years Hanson has grown the company at a conservative but persistent fashion. He is now faced with an investment opportunity that promises swift growth but also accompanies significant amount of risk. Excel Sheet Projections for Expansion Project   Investment Appraisal for Expansion Project 2009-2018   Free Cash Flows, NPV, IRR, MIRR    Calculation of Cost of Capital   Riskfree Rate, Market Risk Premium, EquityBeta, Cost of Equity, Cost of Debt, WACC    Sensitivity Analysis of Key Projections Decrease of 10% Current Increase of 10%     Capacity Utlilization, Selling Price, WACC, Production Cost    Questions Covered 1.   How would you describe HPL and its position within the private label personal care industry? 2.   Using assumptions made by Executive VP of Manufacturing, Robert Gates, estimate the project’s FCF’s.    Are Gates’ projections realistic?  If not, what changes might you incorporate? 3.   Using CFO Sheila Dowling’s WACC schedule, what discount rate would you choose? What flaws, if any, might be inherent in using the WACC as the discount rate? 4.   Estimate the project’s NPV.  Would you recommend that Tucker Hansson proceed with the investment? Keywords Expansion, Forecasting, Present value, Valuation Status  Available  This case solution is ready. You can download it immediately after purchasing. Download link will be sent in payment comfirmation email.   Download Solution in 2 Minutes  
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