7.1 Study the case "Whirlpool Europe," Harvard Business School Case # 9-202-017 (Rev: November 22, 2002) and answer the following questions. The case materials may be purchased by contacting its publisher at www.custserve@hbsp.harvard.edu or at 1-800- 545-7685.

A. What is this case about? B. Cash flows are to be generated by several sources, if an investment in EPR system is made. There are four waves of implementation described in the case over the period of 1999–2007. Calculate the cash flows for all waves due to 1. Improved inventory (One-time, nontaxable) 2. Additional sales due to better product availability (continuous, taxable) 3. Improved margin (continuous, taxable) C. Analyze the interactions between these three sources of cash flows. What is your finding? D. Calculate the present value of the combined after-tax cash flows from these three sources for the period of 1999 to 2007. E. When deciding on the proposed ERP investment, should value be included for possible cash flows that occur beyond 2007? What does it depend on? F. Would you recommend the ERP investment? What is your major concern? G. What are the lessons you have learned from having studied this case?