• Briefly describe Harmonic Hearing Co., the hearing aid industry, and the proposed transaction.
• Compare and contrast the two financing alternatives presented in the case.Why do the forecasted revenues, expenses, profits, and free cash flows generated by Harmonic in years one through seven differ between the two financing alternatives?
• Based on the facts of the case and the forecasts, what are the positives and negatives of financing the transaction with debt?
• Based on the facts of the case and the forecasts, what are the positives and negatives of financing the transaction with equity?
• Calculate the IRR on the ownership interest (investment) of Harriet Burns and Richard Irvine for the debt financing alternative and the equity financing alternative.
• What is the NPV of Burns and Irvine'sinvestment for each alternative using the following discount rates: 25%, 35%, and 45%?