Case Solutions/ Notes for Hansson Private Label, Inc.: Evaluating an Investment in Expansion by Erik Stafford, Joel L. Heilprin, Jeffrey DeVolder

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This case of a potential expansion opportunity at Hansson Private Label (HPL), a midsize producer of private label personal care products, is intended to teach undergraduate and first-year MBA stude... nts the basics of capital budgeting analysis. It assumes a basic understanding of financial statements, cash flows, and the time value of money. Familiarity with the weighted average cost of capital (WACC) and the derivation of discount rates is helpful but not required. The HPL case requires students to synthesize financial information provided by different operating departments into a set of projected, unlevered free cash flows (FCFs). Students must then choose the correct discount rate and determine the project’s net present value (NPV). The case also provides instructors with the opportunity, time permitting, to explore other topics, including economic value added (EVA) and value additivity. [Show More]

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