Carded Graphics, Llc: Sheeter Replacement Decision

14 Pages Posted: 30 May 2017

See all articles by Marc L. Lipson

Marc L. Lipson

University of Virginia - Darden School of Business

Irene Mastelli

University of Virginia - Darden School of Business

Abstract

A growing folding carton company is contemplating the replacement of an old machine with a new one. The case challenge is to develop a cash flow forecast and determine the proper discount rate for the machine replacement. In addition to increased capacity and reduced waste, the new machine offers strategic advantages to the firm in its chosen market niche. Issues related to operations are central to appreciating the importance and implications of this capital investment: Operating excellence is a key competitive advantage for this firm. A teaching note and student and instructor Excel spreadsheets are available to accompany the case for instructors.

Excerpt

UVA-F-1606

Rev. Dec. 4, 2012

CARDED GRAPHICS, LLC: SHEETER REPLACEMENT DECISION

I don't play to lose.

—Murry Pitts,

Carded Graphics owner and president

. . .

Keywords: Capital Budgeting, Operations, WACC, Folding Carton

Suggested Citation

Lipson, Marc Lars and Mastelli, Irene, Carded Graphics, Llc: Sheeter Replacement Decision. Darden Case No. UVA-F-1606. Available at SSRN: https://ssrn.com/abstract=2974441

Marc Lars Lipson (Contact Author)

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States
434-924-4837 (Phone)
434-243-5021 (Fax)

HOME PAGE: http://www.darden.virginia.edu/faculty/lipson.htm

Irene Mastelli

University of Virginia - Darden School of Business

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

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