IVTL: Assessing Project Economic Viability

內容大綱
Indus Valley Telecom Ltd. (IVTL) wanted to set up an optical fibre cable plant at its subsidiary, Cosmic Equipment Company Ltd. The general manager of IVTL had hired an outside consulting agency that determined that the project was technically viable. Next, in January 2016, the general manager needed to conduct a comprehensive economic viability study of the project before presenting the proposal to IVTL management for approval. The decision of whether to proceed now depended on the outcome of the economic assessment.
學習目標
This case can be taught as part of a project finance or strategic corporate finance curriculum. It is intended for second-year finance graduate students who have basic knowledge of financial accounting and corporate finance. Working through the case will give students the opportunity to undertake the following:<ul><li>Prepare forecasted financial statements for the project from the basic data to assess its economic viability.</li><li>Evaluate the project based on a comprehensive financial analysis.</li><li>Carry out sensitivity analysis of the project based on key underlying input variables.</li><li>Assess whether the company will be able to raise long-term debt for the project.</li><li>Decide whether the project is economically viable.</li></ul>
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