# Lockheed Hbr Case

2692 Words Apr 19th, 2013 11 Pages
Investment Analysis and Lockheed Tri Star
(Submission-1)

by

WMP 08009 Davinder Singh
WMP 08022 Manish Kumar Singh
WMP08035 Rahul Yadav
WMP08036 Rajesh Ganvir

A report submitted in fulfillment of the assignments for
Financial management

WMP 2015

Indian Institute of Management, Lucknow
Noida Campus
Date: 30.03.13

1. Rainbow Products | : | | | | | | | | Scenario 1 : Purchase of Paint- Mixing machine to reduce labor cost | | | | | | Expected Saving (\$) | 5000 | per year | | Cost of machine (\$) | 35000 | | | Depreciation in | 15 years | | | Rate @ cost of capital | 12% | | |

A: Objective: Compute payback, NPV and IRR to decide whether
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Q 3. mba tech
The questions have been attempted as follows and the same analogy has been taken to excel for rest of the part of the question:
A. Subsidy to be given to get the IRR of 25%
Present Value = 371739/1.25 + 371739/1.25^2 + 371739/1.25^3+371739/1.25^4 = 877898.8224
Now, if this the amount that can give us a IRR of 25% with 371739 as annual return for next four years then we can easily have a subsidy of = 1000000 - 877898.8224 = 122101.1776 ~= 122101

t

Q4. value added industries

A. NPV = \$100,000 = Inflow – outflow = 210000 - 110000
B. 1001 shares need to be issued with fair value of 109.91 \$
C. The new project brings the additional cash flow that raises the NPV and thus the fair value of the share has been appreciated. The investing into the new project will be a welcome note if the cash inflow happens as per the details provided in the question.

Lockheed Tri Star Case Study

executive summary
Although highly regarded by the military, Lockheed sought to move into the lucrative civilian commercial aviation sector and compete with Boeing, McDonnell Douglas and Airbus. Lockheed began design and testing in 1966 on their entry, the “Tri Star”, which boasted a range of over 6,000 miles with nearly 400 passengers and speeds of close to 600 mph. They had already invested nearly \$900 million in development costs. Carried by state of