NETWORK DESIGN IN AN UNCERTAIN ENVIRONMENT

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NETWORK DESIGN IN AN UNCERTAIN ENVIRONMENT

• Bottom Line Results

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AGENDA

• IMPACT (6.1)
• DISCOUNTED CASH FLOW (6.2)
• UNCERTAINTY (6.3)
• DECISION TREES (6.4)
• IN PRACTICE (6.6)

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IMPACT

• Investment Decisions
• Long term
• Customer service
• Expense

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IMPACT

• Concerns
• Uncertainties
• Term
• Value/Capitalization
• Operations
• Debt
• Equity

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AGENDA

• DISCOUNTED CASH FLOW (6.2)

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DCF
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DCF
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DCF
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DCF
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DCF Setting Up The Problem

• Determine initial capital outlay
• Determine annual cost savings
• Determine depreciation schedule
• Determine taxes

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DCF Setting Up The Problem

• Determine net, net
• Add back depreciation
• Apply discount factor

• Determine After Tax Net Cf

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DCF Setting Up The Problem
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DCF Setting Up The Problem
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DCF Setting Up The Problem
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AGENDA

• IN PRACTICE (6.6)

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IN PRACTICE

• Consider Strategy and Finance
• Use Multiple Metrics
• Use Financial Analysis as Input
• Use Estimates (SWAG)

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SUMMARY AND CONCLUSIONS