Cummins, Epley, and Mayo, a U.S. construction firm, has been selected as the general contractor for the reconstruction of the road project in Saudi Arabia. On the basis of the valuation of the company, the project includes 15% profit on costs, well below the required 18%. Because of the substantial discounts and specific payment terms, IRR of the project is 40%. This case can be used as an introduction or enhancement of discounted cash flow techniques. This provides a sharp image of the value of money over time, the ability to analyze the sensitivity and the ability to use decision diagrams to structure realistic contingencies. "Hide
dhahran roads case solution
by Sherwood C. Frey Jr., Michael Schlosser Source: Darden School of Business 2 pages. Publication Date: 05 April 1991. Prod. #: UV6118-PDF-ENG
Related Case Solutions & Analyses:
Welsh Water (B): General Information and Confidential Instructions for M. Harrington Lead Negotiator for Welsh Water
Barilla Sp(C)
Northern Telecom and Tong Guang Electronics (A2): Getting to Know Each Other
Hassan Shahrasebi: The Golden Boy
Wal-Mart in East Asia
Siemens Electric Motor Works (B): Pricing Interdivisional Sales
Flibe Energy: Pursuing a Safe, Affordable, and Sustainable Energy Future
Procter & Gamble: Global Business Services
News Corp.
Lending Club: Part B
