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Hi there I have to analyse this case for homework and I had a few questions: Q1 - what would the best approach to evaluating

Hi there

I have to analyse this case for homework and I had a few questions:

Q1 - what would the best approach to evaluating whether the extension to the new line be? would an IRR / NPV approach be adequate?

Q2 - My understanding is that we would take the sales of the extension of the modern line (first line in the table) and build a free cash flow model forecast around this. is this a sensible approach?

Q3- would it be adequate to provide a recommendation around an IRR/NPV calculation for just the top row of table one? or would more analysis be required?

Thanks

Henry

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