PROJECTS MBA ISBM EXAM ANSWER SHEETS PROVIDED WHATSAPP 91 9924764558
CONTACT:
DR. PRASANTH MBA PH.D. DME MOBILE / WHATSAPP: +91 9924764558 OR +91 9447965521 EMAIL: prasanththampi1975@gmail.com WEBSITE: www.casestudyandprojectreports.com
PROJECTS
CASE STUDY : 1
The sales of a certain product during a 15 year period have been as follows.
Period Sales Period Sales Period Sales
1 1000 6 2050 11 2950
2 1150 7 1900 12 3500
3 1320 8 2400 13 4050
4 1600 9 2650 14 4250
5 1750 10 3040 15 4600
Q1) Find the least squares regression line for the data given?
Q2) For the data given above, assume that the forecast for period 11 was 3250. If it is equal to 0.4 derive
the forecasts for the periods 12 to 15, using the exponential smoothing period?
Q3) Explain moving average method?
Q4) For the data given in this problem, set n equal to 4 and develop forecasts for the periods 12 to 15 using
the moving average method?
CASE STUDY : 2
Your company is considering two projects – Project M and Project N, each of which requires an initial outlay
of Rs 50 million. The expected cash inflows from these projects are :-
Year Project M Project N
1 Rs 11 Million Rs 38 Million
2 19 22
3 32 18
4 37 10
AN ISO 9001 : 2008 CERTIFIED INTERNATIONAL B-SCHOOL
Q1) What is the payback period for each of the projects?
Q2) What is the discounted payback period for each of the projects if the cost of capital is 12 percent?
Q3) If the two projects are independent and the cost of capital is 12 percent which project (s) should the firm
invest in?
Q4) If the two projects are mutually exclusive and the cost of capital is 10 percent, which project should the
firm invest in?
CASE STUDY : 3
Praveen B a Ph D in molecular biology, is working as a professor in the International Science Institute.
Based on this research work, he has developed an enzyme which he believed has commercial potential.
Praveen B has set up Enzy Laboratories to commercially develop the product.
Enzy Lab. Has approached Gamma Venture Capital with a funding request for Rs 200 million by way of
equity. Gamma requires a rate of return of 30 per cent from its equity investment in Enzy and its planned
holding period is 5 years. Enzy has projected an EBITDA of Rs 300 million for year 5, which Gamma
considers to be credible. Gamma believes that an EBITDA multiple of 6 for year 5 to be reasonable. At the
end of year 5, Enzy is likely to have a debt of Rs 200 million and a cash balance of Rs 80 million.
Q1) What share in equity of Enzy will Gamma ask for?
Q2) What factors generally influence valuation of VC deals?
Q3) What incentive mechanisms are usually incorporated in VC deals?
Q4) Discuss the considerations an entrepreneur like Praveen B should bear in mind while approaching a VC
Fund?
CASE STUDY : 4
Sam Company has 20 million equity shares outstanding. The book value per share is Rs 40 and the market
price per share is Rs 120. Sam Company has two debentures issues outstanding. The first issue has a face
value of Rs 300 million, 12 percent coupon, and sells for 90 percent of its face value. It will mature in 5
years. The second issue has a face value of Rs 200 million, 14 percent coupon, and sells for 102 percent of
its face value. It will mature in 6 years. Sam Company also has a bank loan of Rs 200 million on which the
interest rate is 15 percent.
Q1) What are Sam Company’s capital structure weights on a book value basis?
Q2) What are Sam Company’s capital structure weights on a market value basis?
Q3) Which weights would you use?
Q4) Why explain in detail?
CONTACT:
DR. PRASANTH MBA PH.D. DME MOBILE / WHATSAPP: +91 9924764558 OR +91 9447965521 EMAIL: prasanththampi1975@gmail.com WEBSITE: www.casestudyandprojectreports.com
PROJECTS
CASE STUDY : 1
The sales of a certain product during a 15 year period have been as follows.
Period Sales Period Sales Period Sales
1 1000 6 2050 11 2950
2 1150 7 1900 12 3500
3 1320 8 2400 13 4050
4 1600 9 2650 14 4250
5 1750 10 3040 15 4600
Q1) Find the least squares regression line for the data given?
Q2) For the data given above, assume that the forecast for period 11 was 3250. If it is equal to 0.4 derive
the forecasts for the periods 12 to 15, using the exponential smoothing period?
Q3) Explain moving average method?
Q4) For the data given in this problem, set n equal to 4 and develop forecasts for the periods 12 to 15 using
the moving average method?
CASE STUDY : 2
Your company is considering two projects – Project M and Project N, each of which requires an initial outlay
of Rs 50 million. The expected cash inflows from these projects are :-
Year Project M Project N
1 Rs 11 Million Rs 38 Million
2 19 22
3 32 18
4 37 10
AN ISO 9001 : 2008 CERTIFIED INTERNATIONAL B-SCHOOL
Q1) What is the payback period for each of the projects?
Q2) What is the discounted payback period for each of the projects if the cost of capital is 12 percent?
Q3) If the two projects are independent and the cost of capital is 12 percent which project (s) should the firm
invest in?
Q4) If the two projects are mutually exclusive and the cost of capital is 10 percent, which project should the
firm invest in?
CASE STUDY : 3
Praveen B a Ph D in molecular biology, is working as a professor in the International Science Institute.
Based on this research work, he has developed an enzyme which he believed has commercial potential.
Praveen B has set up Enzy Laboratories to commercially develop the product.
Enzy Lab. Has approached Gamma Venture Capital with a funding request for Rs 200 million by way of
equity. Gamma requires a rate of return of 30 per cent from its equity investment in Enzy and its planned
holding period is 5 years. Enzy has projected an EBITDA of Rs 300 million for year 5, which Gamma
considers to be credible. Gamma believes that an EBITDA multiple of 6 for year 5 to be reasonable. At the
end of year 5, Enzy is likely to have a debt of Rs 200 million and a cash balance of Rs 80 million.
Q1) What share in equity of Enzy will Gamma ask for?
Q2) What factors generally influence valuation of VC deals?
Q3) What incentive mechanisms are usually incorporated in VC deals?
Q4) Discuss the considerations an entrepreneur like Praveen B should bear in mind while approaching a VC
Fund?
CASE STUDY : 4
Sam Company has 20 million equity shares outstanding. The book value per share is Rs 40 and the market
price per share is Rs 120. Sam Company has two debentures issues outstanding. The first issue has a face
value of Rs 300 million, 12 percent coupon, and sells for 90 percent of its face value. It will mature in 5
years. The second issue has a face value of Rs 200 million, 14 percent coupon, and sells for 102 percent of
its face value. It will mature in 6 years. Sam Company also has a bank loan of Rs 200 million on which the
interest rate is 15 percent.
Q1) What are Sam Company’s capital structure weights on a book value basis?
Q2) What are Sam Company’s capital structure weights on a market value basis?
Q3) Which weights would you use?
Q4) Why explain in detail?
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