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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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xxxxxxx xxxxxxx Budget
xxx decision xx capital xxxxxxx is among xxx xxxx significant x firm xxx xx make. A decision to build a new plant or expand xxxx a foreign market xxx influence xxx xxxxxxxxxxx of xxx xxxx over xxx xxxx xxxxxxxxxxxx xxxxxxx budgeting decision involves xxx planning of expenditures for x xxxxxxx xxxx x xxxx of at xxxxx one year xxx usually considerably xxxxxxx Capital xxxxxxxxx xxxxx xx determining xxxx xxx should a xxxx xxxxxx its xxxxxxxx
Evaluation of the xxxxxxx
xxxxxxxxx xxxxxxx budgeting xxxxxxx xxxx xxxxxxxxxxxx xxxxxx (which analysis the time or xxxxxx of years xxxxx xx required xx cover xxx initial outlay xx xxxxxxxxxx xx the xxxxxxxxx Accounting Rate of return (this xx xxxx xxxxx as xxxxxx xx investment, xxxxx measures xxx profitability of an xxxxxxxxxx xxxxxxxxxxx its xxxxxxxxx statements), Discounted xxxxxxx xxxxxx xxxxxx analysis the time or xxxxxx xx xxxxx xxxxx xx required to cover xxx xxxxxxx outlay
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Genesis xxxxxxxxxx xxxxxxxxxxxxxxxxx
xxxxxxx xxxxxxxxxx xxxxxxxxxx
xxxxxxx has xxxxxxxxxx xx xxxxxxxxxxx xxxxxxxxxxxx xxxx end xxxxxxxxx xxxxxxxx based Products. Genesis has xxx xxxxxxxx xxxxxxxxx xxxxxx in Canada only. xxxxxxx wanted xxxxxx xxx xxxxxxxx to xxxxxxx US
The xxxxxxx xxxxxxxxxxx xxxxxxxx highly xxxxxxxxx xxxxxxxx xxx hardware applications xxx high-end commercial and military xxxx Genesis is xxxxxxxxxxx expanding its production operations xx lower cost xxxxxxxxx xxxxxxx the United States. xxx xxxxxxx currently xxx facilities xx Canada xxx realizes xxx xxxx for further xxxxxxxxx xx xxxxx to xxxxxxx xxxxxx to global xxxxxxxxxx
xxxxxxx xxx xxx Financial xxxxxxxxxxx first xxx xx its Family xxxxxxx Second xxx xx Equity Investment The available xxxxxxxxx xxxxxxx can not xxxxxxx xxx expansion dreams xx xxx xxxxxxx xx xxx xxxx
At present Genesis has only two xxxxxxxxx options xxxxxxxxx which xxx xxx xxxx xxxxxxxxx xx its xxxxxxxxxx
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