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Summary Worldwide Paper Company Case: Blue Ridge Mill Bob Prescott is the controller for the Blue Ridge Mill at December 2006. He want to add a new on-site longwood woodyard. Its have two benefit on the addition for Blue Ridge Mill, first is to eliminate the need to purchase shortwood from an outside supplier. Second is for create the opportunity to sell shortwood in the open markets as a new market for Worldwide Paper Company (WPC). So the new wood yard would reduce the operating cost and increase the revenues. Prescott realizes that there are some benefits in adding in the wood-yard. First they would no longer need to purchase shortwood from their competitor The Shenandoah Mill. The next benefit was creating a new opportunity to sell shortwood on the open market and be able to level the competition between The Shenandoah Mill. These benefits will help to lower the operating cost and raise revenues for the Blue Ridge Mill. Bob the controller at the Blue Ridge Mill needed to know if the 18million investment in expanding the company was worth it. In order to see if it was worth, first we put together the relevant cash-flows. Bob Prescott want to know if an investment of 18million on an on-site longwood woodyard and new equipment would be worth the risk. Questions 1. What is the investment that is under consideration? What are the potential sources of value (cost savings or revenue increases)? 2. Itemize the cash flows for each of the six years of the investment. 3. What changes would you make to these base case numbers? Summary Worldwide Paper Company Case: Blue Ridge Mill Bob Prescott is the controller for the Blue Ridge Mill at December 2006. He want to add a new on-site longwood woodyard. Its have two benefit on the addition for Blue Ridge Mill, first is to eliminate the need to purchase shortwood from an

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