F08 REFERENCE ALLOCATION MEMO AND MODEL HANDOFF
Original fictional teaching cases; USD thousands, 10 October 2026. Attempt the starter and unfamiliar assessment before this reference.

LARCH REFERENCE MEMO
Recommend Automated under the stated four-year cash, tax, risk and funding assumptions. Its NPV is 170.69 versus Compact's 114.99 at 10%, adding 55.70 of value. Compact's higher 20.90% IRR does not overturn the mutually exclusive NPV comparison; Automated's IRR is 19.25%. The 770 initial investment leaves 130 cash against a 100 reserve, only 30 of time-zero headroom. Confirm financing and intrayear cash needs before committing, and do not treat that 30 as an automatic payout recommendation.

Validate Automated's annual revenue forecast of 570. Holding costs and other assumptions fixed, the NPVs tie at revenue 546.569489, a decline of about 4.11%. At 540, Automated NPV falls to 99.37 and Compact becomes preferable. This is a relative choice threshold, not a zero-NPV threshold, probability or coherent downside forecast. With cash of 800, Automated is excluded by the reserve even at base revenue. Seek order, margin, capacity and collection evidence, model related downside changes, and document the funding condition and decision owner before approval.

CEDAR CHECKPOINT AFTER ATTEMPT
Refit NPV 68.412018; Replace 73.039700; advantage 4.627682. IRRs 20.986959% and 16.850866%. At cash 760 and reserve 80, headroom is 350 and 20. Recommend Replace conditionally. Revenue tie 497.823440. At cash 700, Replace breaches the reserve and Refit becomes the feasible choice. Confirm the narrow value advantage against the revenue evidence.

MODEL HANDOFF
Allocation contains inputs, linked calculation schedules and summary; Recommendation contains the written response and test log. Yellow/blue cells are supplied inputs; green cells are learner formula targets. Solution workbooks contain all formulas. Enter missing formulas rather than hard-coding the summary. Cells C14:C17 hold rate, tax, cash and reserve. Compact/Refit inputs are C23:C27; Automated/Replace inputs G23:G27. Formula outputs include C5:D8, C10:C11 and G10:G11. Rows 37:51 and 55:69 show dated cash, discount factors, present values and a separate direct-cash check.

All operating cash is end-year. Initial capex and working capital occur at time zero. Four-year straight-line tax depreciation reaches zero; working capital stays flat and is fully recovered in year four. Disposal tax uses zero basis. The parent immediately uses incremental tax losses. Interest and borrowing are excluded from enterprise cash flows. The rate is an assumed compatible project return; the cash rule tests only time-zero affordability. No ongoing terminal value, reinvestment cycle, changing tax law, transaction tax detail or funding facility is embedded in this project sheet. It is not a complete company forecast.

TEST LOG
Restore baseline between isolated tests. Change Automated revenue 570 to 540, then separately starting cash 900 to 800. Verify the tie with the unrounded revenue threshold and values on either side. Increase capex and explain depreciation, tax, cash and NPV effects. Distinguish a missing input from numeric zero. Record original/new input, dependent outputs, conclusion, restoration and reviewer. Formula checks do not grade the business judgment or written recommendation. Public answer files make this unsuitable as a secure hiring test.

SOURCES
Original authored assumptions. Conceptual reading: OpenStax Principles of Finance chapters 15–17; Damodaran, The Fundamental Determinants of Growth. Original examples and diagrams; no textbook prose or figures reproduced. Separate JavaScript and Python Decimal cash calculations, native Univer and artifact-engine checks are recorded in the source repository. These implementations share an author; they are not an independent human review or execution in desktop Microsoft Excel.
