Federal Express Corporation VS. United Parcel Service of America, Inc. Case 4 1.

Describe the competition in the overnight package delivery industry and the strategies by which these two firms are meeting the competition. What are the enabling and inhibiting factors facing the two firms as they pursue their goals? Do you think either firm can attain sustainable competitive advantage in this business? 2. How have Federal Express and United Parcel Service performed since the mid1980s? Which firm is doing better? Prepare the insights you derived from the two firms' financial statements, financial ratios, stock price performance, and economic profit (or EVA). Also, describe how EVA is estimated, and its strengths and weaknesses as a measure of performance. 3. If you had to identify one of these companies as "excellent" which would you choose? On what basis? More generally, what is "excellence" in business? Case 13:Nike, Inc.: Cost of Capital 1. What is WACC and why is it important to estimate a firms cost of capital? 2. Do you agree with Joanna Cohens WACC calculation? Why or why not? 3. If you do not agree with Joannas analysis, calculate your own WACC for Nike and be ready to justify your assumptions. 4. Calculate the costs of equity using CAPM, the dividend discount model (DDM), and the earnings capitalization model (ECM). What are the advantages and disadvantages of each method? 5. What should Kimi Ford recommend regarding an investment in Nike? Case 15: Teletech Corporation, 1. How does Teletech currently use the hurdle rate? 2. Please estimate segment WACCs for Teletech. 3. Interpret Rick Phillipss graph (Figure 2 in the case). How does the choice of constant versus risk-adjusted hurdle rates affect the evaluation of Teletechs two segments? What are the implications for Teletechs resource-allocation strategy? 4. Do you agree, All money is green? What are the implications of this view? What are the arguments in favor? Opposed? 5. Is Helen Buono right that management would destroy value if all of the firms assets were redeployed into only the telecommunications business segment? Why or why not? Please prepare a numerical example to support your view. 6. Has Products and Systems destroyed value? What evidence or illustration can you give to support your opinion? 7. What should Teletech say in response to Victor Yossarian? .Euroland Case 24 1. Prepare to discuss the strengths and weaknesses of the various measures of investment attractiveness as used by Euroland Foods. Will all of the measures rank the projects identically? Why or why not?

2. Please rank the 11 proposals on the basis of purely economic considerations. Then rank them a second time based on any other considerations that you believe are important. Are the rankings identical? Why or why not? 3. Which set of projects should Wilhelmina Verdin recommend to the board of Euroland Foods for the capital budget for 2001? STAR RIVER ELECTRONICS LTD. Case 25 1. Assess the current financial health and recent financial performance of the company. What strengths and/or weaknesses would you highlight to Adeline Koh? 2. Forecast the firms financial statements for 2002 and 2003. What will be the external financing requirements of the firm in those years? Can the firm repay its loan within a reasonable period? 3. What are the key driver assumptions of the firms future financial performance? What are the managerial implications of those key drivers? That is, what aspects of the firms activities should Koh focus on especially? 4. What is Star Rivers weighted-average cost of capital (WACC)? What methods did you use to estimate WACC? What are the key assumptions that especially influence WACC? 5. What are the free cash flows of the packaging machine investment? Should Koh approve the investment? THE WM. WRIGLEY JR. COMPANY- CASE 34. 1. In the abstract, what is Blanka Dobrynin hoping to accomplish through her activeinvestor strategy? 2. What will be the effects of issuing $3 billion of new debt and using the proceeds either to pay a dividend or to repurchase shares on: a. Wrigleys outstanding shares? b. Wrigleys book value of equity? c. The price per share of Wrigley stock? d. Earnings per share? e. Debt interest coverage ratios and financial flexibility? f. Voting control by the Wrigley family? 3. What is Wrigleys current (pre-recapitalization) weighted-average cost of capital (WACC)? 4. What would you expect to happen to Wrigleys WACC if it issued $3 billion in debt and used the proceeds to pay a dividend or to repurchase shares? 5. Should Blanka Dobrynin try to convince Wrigleys directors to undertake the recapitalization?