Question
Read the Diamond Energy Resources case. Calculate the WACC based on the information provided in the case. Build out a basic discounted cash flow (DCF)
Read the Diamond Energy Resources case. Calculate the WACC based on the information provided in the case. Build out a basic discounted cash flow (DCF) model and evaluate the project, using the calculated WACC as the discount rate. In completing this analysis, answer the following questions:
1) What are the key elements to keep in mind when determining the free cash flows for investment analysis?
2) How did you determine if the investment is creating value? Specifically, what metrics did you use in your analysis?
3) What sensitivity analysis should you consider in this project analysis and why?
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Operations Management Processes and Supply Chains
Authors: Lee J. Krajewski, Larry P. Ritzman, Manoj K. Malhotra
10th edition
978-013280747, 132807394, 9780132951814, 132807475, 132951819, 978-0132807395
