Carded Graphics, LLC: Sheeter Replacement Decision
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 captial 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.