Whirlpool Europe Analysis
Whirlpool Europe Analysis
Please answer the following question about the NPV analysis:
1. What are the key assumptions of this analysis?
Average salary per employee is equal to 100k and a number of participating employees which has 50 employees per each of the 4 waves. The consulting cost is that 15400 per month._
2. The current NPV is negative. One way to save money would be to reduce consulting costs. Please set the average consulting cost per month in cell b33 to $5000. At what discount rate is the NPV for the project 0?_____0.026____
3. Returning the consulting cost to $15,400 per month, at the original discount rate of .09, what is the impact on NPV if you double the number of employees participating in the project? __-25.7million________
4. Returning the number of employees participating to 200, what is the impact on NPV if the consulting fee turns out to be $20,000 per month? ___-10.1million_______
5. Returning the consulting salary to $15,400 per month, what is the impact on NPV of doubling the number of consultants required each month?
-
___-11.4million________
6. Returning to the original staffing levels for consultants, how much more than estimated do the benefits have to be to make the project attractive? To answer this question, use the benefits adjustment factor in the “Key Factors to Manipulate” table.
___17.7%___________
Options Pricing Analysis (Worksheet 2)
7. What are you buying an option to do?
I want to invest this company to make money. Besides I want to improve company competitiveness in the market by using technology.
8. Given an option cost of $4 million and the value of the option in worksheet 2, should Whirlpool proceed or abandon the project? _Proceed____
9. Suppose that Whirlpool finds a way to reduce the costs of the project by 5%. Please change the cost factor in cell G31 to 95%. What is the value of the option now?
Please answer the following question about the NPV analysis:
1. What are the key assumptions of this analysis?
Average salary per employee is equal to 100k and a number of participating employees which has 50 employees per each of the 4 waves. The consulting cost is that 15400 per month._
2. The current NPV is negative. One way to save money would be to reduce consulting costs. Please set the average consulting cost per month in cell b33 to $5000. At what discount rate is the NPV for the project 0?_____0.026____
3. Returning the consulting cost to $15,400 per month, at the original discount rate of .09, what is the impact on NPV if you double the number of employees participating in the project? __-25.7million________
4. Returning the number of employees participating to 200, what is the impact on NPV if the consulting fee turns out to be $20,000 per month? ___-10.1million_______
5. Returning the consulting salary to $15,400 per month, what is the impact on NPV of doubling the number of consultants required each month?
-
___-11.4million________
6. Returning to the original staffing levels for consultants, how much more than estimated do the benefits have to be to make the project attractive? To answer this question, use the benefits adjustment factor in the “Key Factors to Manipulate” table.
___17.7%___________
Options Pricing Analysis (Worksheet 2)
7. What are you buying an option to do?
I want to invest this company to make money. Besides I want to improve company competitiveness in the market by using technology.
8. Given an option cost of $4 million and the value of the option in worksheet 2, should Whirlpool proceed or abandon the project? _Proceed____
9. Suppose that Whirlpool finds a way to reduce the costs of the project by 5%. Please change the cost factor in cell G31 to 95%. What is the value of the option now?