Describe the relevant financial parameters for any real option(s) (see Table 6.6; you do not need to calculate the present value of cash flows, but explain, briefly, how you would) Are there any other strategic considerations would affect your decision that you cannot capture in an ROA or real options analysis?

Note: reliance on outside material will result in inaccurate and/or irrelevant responses. You are not expected to do research on the company outside of the information presented here. For this case, please see the summary document (“Nucor Case Study.pdf”) You can also use the Calculation Template workbook posted to evaluate the investment proposed in the case study (it is not required though) After reading the case respond to the following prompts: As stated in the case Nucors evaluation of investments is centered around achieving a requisite ROA of 25% within five year of implementation. Under the circumstances described in the fifth year of the project (the third year operating the plant), annual cash flow for the plant is $60,970,000. Would Nucor pursue the project? Do you see any problems with Nucors criteria? What types of real option(s) would be generated through Nucors investment at the new plant (see pages 156-158 and the 1st column of Table 6.1 in your textbook)? Describe each real option you identify (in one sentences each; see the 2nd column of Table 6.1). Ultimately, how would you recommend Nucor evaluate potential projects in the future (your proposed should be analytical, but can include subjective, non-quantitive considerations)?

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