Urika Corp. manufactures a variety of kitchen and dining equipment from mixers and food processors to flatware, serving utensils, cooking utensils, and other items for consumer and commercial use. Urika went public in 1984 at $27/share on the market (netting $23/share for the firm) and began issuing dividends in 1990 without missing a year since then. Due to their low debt and wise reinvestment of earnings, today the companys stock sells for $200/share.

As the company prepares for the next year, the President has tasked the senior leadership with finding major expansion projects in order take market share from industry leaders such as GE and Whirlpools subsidiary, KitchenAid. Over the past 5 years, the company has accumulated significant amounts of cash and other marketable assets to fund this expansion without materially affecting the firms debt or diluting the stockholders equity. The CFO has determined $22,500,000 will available in the 2012 capital budget to fund these new projects.

One project involves building the plant and equipment to equip and supply a new up-and-coming restaurant chain, Fast N Healthy, which has been making great strides at competing with fast-food chains along the West coast, and wants to re-equip and re-model existing stores and open 200 new stores nationwide over the next four years. Mr. Tony Estabal, Senior Vice President for Business Development at Urika is certain Urika will secure the four-year contract with Fast N Healthy due to Urikas previous successful work with the restaurant, their cost savings measures, and their experience and reputation within the industry. To compete with other bidders, Urika is able to provide some cost breaks to the restaurant chain for other kitchen and dining supplies because Urikas main plant is located near the restaurant chains main distribution warehouse. Even if Urika cannot under-bid competitors on price alone, other value-added benefits such as their existing relationship, reputation in the industry, and location would edge them over the competition. There is little to no risk of not securing this contract; therefore, this project has been given a priority green light status by the President and the corporations board.

PROJECTED GROSS REVENUE Scenario: Worst Case Likely Best Case Probablitly 15% 65% 20% Year 1 $1.35M $1.48M $1.62M Year 2 $1.60M $1.85M $1.96M Year 3 $1.75M $2.80M $3.22M Year 4 $1.98M $3.25M $3.60M PART 2 - SCENARIO ANALYSIS (10 points) Using your model from above, now USE SCENARIO MANGER to create a scenario analysis report showing the yearly cash flows, NPV and IRR for the mutually exclusive scenarios that follow: Scenario 1: The Probabilities for Worst, Probable and Best change to 25%/50%/25% Scenario 2: Working Capital is changed to 18% Scenario 3: Overtime changes to a 25% increase (vs. the 14.5%) per $1 of additional revenue Scenario 4: P&E changes to $8.5M Scenario 5: The Ultimate Worst Case: all four of the above at once. NOTE: I DO NOT WANT TO SEE 5 SEPARATE, MANUALLY CALCULATED SCENARIOS. I WANT YOU TO USE SCENARIO MANAGER DATA-WHAT-IF ANALYSIS - SCENARIO MANAGER Please show formulas on work PROJECTED GROSS REVENUE Scenario: Worst Case Likely Best Case Probablitly 15% 65% 20% Year 1 $1.35M $1.48M $1.62M Year 2 $1.60M $1.85M $1.96M Year 3 $1.75M $2.80M $3.22M Year 4 $1.98M $3.25M $3.60M PART 2 - SCENARIO ANALYSIS (10 points) Using your model from above, now USE SCENARIO MANGER to create a scenario analysis report showing the yearly cash flows, NPV and IRR for the mutually exclusive scenarios that follow: Scenario 1: The Probabilities for Worst, Probable and Best change to 25%/50%/25% Scenario 2: Working Capital is changed to 18% Scenario 3: Overtime changes to a 25% increase (vs. the 14.5%) per $1 of additional revenue Scenario 4: P&E changes to $8.5M Scenario 5: The Ultimate Worst Case: all four of the above at once. NOTE: I DO NOT WANT TO SEE 5 SEPARATE, MANUALLY CALCULATED SCENARIOS. I WANT YOU TO USE SCENARIO MANAGER DATA-WHAT-IF ANALYSIS - SCENARIO MANAGER Please show formulas on work