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Genesis Capital plan report
The Genesis operations management team, nearing completion of its agreement with Sensible Essentials, was asked by senior management to present a capital plan for the operating expansion. The capital plan was not to be a wish list but an analysis of the necessary expenditures to successfully establish a fully equipped operating facility overseas.
In addition, senior management requested meaningful financial and operating metrics to ensure that the performance objectives for the facility were being met. The operations management team was given five days to accomplish the following:
Calculate the firm’s WACC.
Prepare and analyze each planned capital expenditure.
Evaluate, rank, and recommend the capital expenditures according to beneficial value to the organization, using evaluation tools NPV, payback, and IRR. Evaluation, ranking, and recommendations should be by category of expenditures. For example, facility, equipment 1, 2, and 3, and inspection.
Using the selected choices in part three, calculate the full cost of establishing a fully equipped facility. This would include the facility, equipment 1, 2, and 3, and inspection. In addition, calculate the payback, NPV, and IRR for the completed facility.
Construct and recommend between three and five metrics to measure the performance of the organization. At least one metric should be dividend decision-making driven.
Prepare an executive summary along with a separate document showing the calculations.
Following the example of the operations management team, do the following:
Download the Capital Budgeting spreadsheet, and compute the WACC for Genesis.
Using the information provided in the spreadsheet, analyze Genesis’s project options.
Using the information provided, calculate the periodic and cumulative net cash flows for each potential project and its associated options. Please note that there are 5 projects (facility, equipment pieces 1, 2, and 3, and internal inspection) and that each project offers multiple configuration options (facility size, equipment type, etc.).
Evaluate, rank, and recommend a specific option for each capital project according to beneficial value to the organization, using evaluation tools NPV, payback, and IRR.
Construct and recommend between three and five metrics to measure the performance of the new operating strategy. At least one metric should reflect dividend policy as it relates to rewarding shareholders.
Prepare an executive summary describing your recommendations for each project and the overall cost, net cash flows, and expected returns of the operating configuration that you recommend. Be sure to justify your recommendations in terms of the investment criteria applied in Step 3 above. Be sure to report the full cost of the facility as it is configured per your recommendations. Present and justify your operating strategy performance metrics.
Your complete report should include all of your calculations as appendices (5 pages, or 1 page for each project).
Write a 5–6-page report in Word format. Apply APA standards to citation of sources. Use the following file naming convention: LastnameFirstinitial_M6_A2.doc.
March 17, 2012, deliver your assignment to the M6: Assignment 2 Dropbox.
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Calculate the firm’s xxxxx
x xxxxxxxxxxx of a firm's cost of capital in xxxxx xxxx xxxxxxxx of capital xx xxxxxxxxxxxxxxx weighted. xxx xxxxxxx sources x common stock, xxxxxxxxx xxxxxx xxxxx and xxx xxxxx long-term xxxx - are xxxxxxxx xx a WACC xxxxxxxxxxxx
WACC xx the xxxxxxx xx xxx costs xx these sources of financing, each of xxxxx is xxxxxxxx by its xxxxxxxxxx use xx the xxxxx situation. By taking a xxxxxxxx xxxxxxxx xx xxx see how xxxx xxxxxxxx xxx xxxxxxx xxx to pay for every dollar it finances. x xxxxxx WACC xx xxx overall xxxxxxxx return on the xxxx xx a whole and, as xxxxx xx is xxxxx xxxx internally by company xxxxxxxxx to determine the xxxxxxxx feasibility of xxxxxxxxxxxx opportunities xxx xxxxxxxx It xx the appropriate discount rate xx xxx xxx xxxx flows xxxx xxxx
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file2.xlsx preview (530 words)
|xxxxxxxx xxxxxxxx||* xxxxxxxx||xxxxx||xx|
|Short-term Note Payablex||x 100,000x||2.50%x||8%|
|Total Current Liabilities||x xxxxxxx||xx|
|xxxxxxxxx xxxx Payablex||x xxxxxxx||xxxxxx||9%|
|xxxxxxxx Payablex||x xxxxxxxxx||xxxxxx||xx|
|xxxxx Liabilitesx||* 1,600,000||xx|
|Common Stock xxxxxxx||* 1,500,000x||37.50%x||10%|
|Operating Equity||* 500,000||12.50%||xxx||xxxx|
|Total Liabilities xxx Equity||* 4,000,000||100.00%|
|xxxxxxx Captial Projectsx||xxxxxxx|
|Initial Investmentx||xxxx Flowx||xxxx xxxxx||Cash Flowx||Cash flowx||xxxx xxxx||xxxxxxxx||Cash Flow||Cash xxxx||Cash xxxxx||Cash flow|
|xxxxxxx A: xxxxxx facility||2000||-200||-300||xxxxx||xxxx||400x||1000||1000||xxxxx||1000||xxxx||xxxx|
|Project xx xxxxxx xxxxxxxxx||xxxxx||xxxxx||-200||100||400x||400x||1500x||1500||xxxx||1500||xxxxx||7.33|
|Project C: 75-emp facility||xxxxx||xxxxx||xxxxx||xxxxx||600||700||2000||2000||2000x||xxxxx||xxxx||7.25|
|xxxxxxxxx 1 x fully automaticx||1500x||-100||100||xxx||400||200||800||800x||800x||800||800x||xxx|
|Equipment x x xxxxxxxxxxxxxxx||xxxxx||xxxx||xxxxx||xxx||xxx||300||600x||600x||xxx||600x||600x||xxxx|
|Equipment 1 x manualx||xxxx||150||xxx||150x||xxx||150x||750x||750||750x||750||xxxx||x|
|Equipment x x xxxxxxxx||xxx||xxxxx||xxxx||250x||xxxx||xxx||700x||xxxx||xxxx||xxxx||xxx||xxx|
|xxxxxxxxx 2 - top xx|
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