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USEC Inc. Case Solution & Answer

This Case is about BUDGETING, COSTS, FINANCIAL ANALYSIS

PUBLICATION DATE: November 05, 2008 PRODUCT #: UV1051-PDF-ENG

USEC Inc. Case Solution

This case was made to present students with the challenges of developing a discounted cash flow (DCF) analysis for a strategically significant capital investment choice. The issue is representative of most corporate investment choices, but it’s especially intriguing because the possibility of the job and of the enormous size of the American Centrifuge Job to substantially impact the stock price. The related cash flows must be determined by pupils, paying close attention to treating input costs, selling prices, time of inflation, depreciation, and investment outlays. Although the primary goal of the case would be to concentrate on the approximation of cash flows, pupils are provided with a clear-cut set of input signals to estimate the weighted average cost of capital of USEC. The case was created for pupils who are learning, or want a refresher on, DCF investigation. Due to the fundamental problems the case works nicely with undergraduate, MBA, and executive education audiences. The case also affords the chance to to investigate various problems associated with capital investment evaluation, step-by-step evaluation, including related prices, cost of capital, and sensitivity analysis.

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