MBA 640 Final Project Guidelines and Rubric

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MBA 640 Final Project Guidelines and Rubric

 

Overview

The final project for this course is the creation of an external capital funding proposal.

 

Most businesses face a landscape of uncertainty and a never-ending stream of risks and opportunities. Managers must continually project the likely financial impact of decisions, make recommendations, act on those decisions, determine how to pay for them, and evaluate the costs and effectiveness of what has been done. Many decisions are short-term, routine, and operational. Others are longer-term investment decisions that require substantial new resources, such as developing new services, expanding into new geographic markets, or undertaking business combinations or spin-offs. Each requires managers to forecast, plan, and make decisions based on a thorough understanding of both internal and external factors that can affect a company’s financial success.

 

For the summative assessment in this course, you will bring your finance and economics knowledge to bear by preparing an external capital funding proposal for a major international investment at a publicly traded corporation. In order to secure the support of potential financial backers, your proposal will need to lay out what the proposed investment opportunity is, how it fits within the company’s broader mission and goals, its financial impact, and the amount being requested and why (including alternative funding mechanisms considered). In addition, it will also need to include information on the organization’s context, risk factors, and microeconomic assumptions that could affect the success of the investment.

 

The project is divided into three milestones prior to the final submission, which will be submitted at various points throughout the course to scaffold learning and ensure quality final submissions. These milestones will be submitted in Modules Four, Six, and Seven. The final submission will occur in Module Nine.

 

In this assignment, you will demonstrate your mastery of the following course outcomes:

 

·         Assess the global microeconomic environment for determining the driving factors that affect business financial decisions

 

·         Develop financial models that project the impact of different business scenarios on financial performance and business planning

 

·         Assess decision alternatives by using time value of money (TVM) and other appropriate financial metrics

 

·         Evaluate the potential impact of internal and external qualitative factors on business activities for supporting strategic financial decisions

 

·         Weigh internal and external funding alternatives for carrying out investment decisions

 

·         Construct persuasive, evidence-based arguments that incorporate legal and ethical behavior and sound financial analysis for soliciting external business funding

 

Prompt

 

Imagine you are a manager working at a publicly traded company. (You will select a company from the list below.) You have been tasked with preparing an investment proposal for a large bank loan to finance a major expansion into another country. Your funding request will include both narrative text and financial models designed to clearly explain and justify the investment proposal, how it will be financed, and its likely impact on the company. As support, you will show the proposal’s most likely financial implications and the consolidated financial projection with and without the project. You should also consider risks—including


global microeconomic factors outside the company that may affect the investment’s success in the targeted country—and describe alternative financial scenarios should sales exceed or underperform your assumptions.

 

Your funding request should be well organized, clear, concise, and free of distracting errors. Because business executives seldom have perfect or complete information, you should base your proposal on data from authoritative sources when possible and make reasonable assumptions where information is not available. As in real life, however, you must clearly specify your assumptions.

 

To begin, choose one of the following publicly traded companies. Once you have chosen your company, you will determine the investment opportunity for which you are seeking funding as well as the country into which your company will be expanding:

 

1.       Keurig Green Mountain

2.       L.S. Starrett Company

3.       Nordstrom, Inc.

 

Specifically, the following critical elements must be addressed:

 

I.            Executive Summary: Briefly summarize the key points of your proposal, giving the loan committee the most essential information while convincing themto read further. Remember this is the first, and sometimes the only, section a selection committee will read in an initial screening.

 

II.            Investment Project: Use this section to describe the investment for which you are seeking funding, its costs, and time frame. Specifically, you should:

 

A.      Describe the investment project. Be sure to provide sufficient detail to give the loan committee a firm sense of the parameters of the activity,the need for it, and what financial metrics are relevant for determining success. In other words, what do you propose to do, where, what marketplace need will it fill, and how will you measure success?

 

B.      Specify the resources the project will require and where these resources will come from. In addition to noting the amount of the loan you are requesting, you should also consider human resources, facilities, government approvals, intellectual property, access to natural resources, and other resources that might be required to carry out the project.

 

C.      Time frame. When will the project start, what is the anticipated economic life of the proposed expansion, and how will you decide if, when, orhow to exit? Justify your choices with appropriate financial metrics.

 

III.            Justification: In this section, you should analyze the impact of the investment proposal on your business. In particular, you should cover:

 

A.      Why is now a good time for this investment given the global context? Justify your response, citing specific external factors such as traderegulations, foreign currency considerations, or trends in foreign direct investment that might affect business financial decisions.

B.      Strategic fit. Use this section to discuss why the investment proposal makes sense for your company strategically. Specifically:

 

1.       How does the investment align with the company’s organizational and financial priorities? Support your argument with evidence from company reports and financial statement analysis designed to persuade the lender that the investment is a good strategic fit for your company.


2.       How does the project fit within the global microeconomic environment? Support your response with evidence. For example, would the expansion tap unmet demand for the company’s key products or services or fill a new niche? How do you know?

 

3.       How does the project build on the organization’s core competencies and comparative advantage? For example, does the company have a strategic advantage in regards to intellectual property, regional expertise, suppliers, or organizational structure?

 

C.      Financial impact. This section should discuss the project’s most likely financial implications and the consolidated financial projection withandwithout the project. Be sure to:

 

1.       Project the incremental, annual, and cumulative cash benefits and outflows associated with the proposed expansion for the next seven to 10 years, using a spreadsheet or other relevant presentation vehicle to support your narrative. Be sure to justify your assumptions and methodology based on sound microeconomic and financial principles. For example, what assumptions have you made about demand, price, volume, capital purchase costs, incremental hiring, and so on?

 

2.       Develop a consolidated financial projection of revenue, pretax income, and cash flow for the overall business, over that same number of years, both with and without the proposed investment. Use a spreadsheet or other relevant presentation vehicle to support your narrative, being sure to describe any relevant assumptions.

 

IV.       Risks: Use this section to discuss any risks that might affect the success of the project and how you have planned for those contingencies. In particular:

 

A.      Internal. What are the company’s most significant internal risks and opportunities related to the project? How might they affect yourfinancialestimates and how will you address them? Support your response with specific examples.

 

B.      External. How will you address significant qualitative risks outside the company that might affect project success? Give specific examples. Forexample, how might culture or politics in the target country affect the proposed investment’s financial success? Natural disasters? How have you planned for these risks?

 

C.      Microeconomic. Assess the microeconomic factors that might affect decisions about the proposed investment. Support your response withspecific examples. For example, how competitive is the market you will be entering? How elastic is the price for your product or service?

D.      Alternate financial scenarios. Use this section to discuss the sensitivity of your financial projections to different scenarios. Be sure to address:

 

1.       How would your projected financial performance change if sales fall 20% short of or are 20% higher than your base assumption? What does your analysis of these two scenarios imply for the proposed investment? Justify your response.

 

2.       What do the net present value, internal rate of return, and payback values from your base scenario and the sales variation scenarios above imply for the proposed investment? Be sure to explain how the time value of money affects your calculations and analysis.

 

V.            Financing: In this section, compare the proposed loan to alternative financing methods. Specifically:

 

A.      Weigh the pros and cons of raising money using internal financing mechanisms versus seeking funding through global capital markets via loans, commercial paper, bonds, or equity financing. Which might be viable alternatives should the loan not be approved? Support your answer with appropriate research and evidence.

 

B.      Assess the viability of a business combination as a mechanism for expanding into the new market. Is this a reasonable option for the company? Why or why not? Support your answer with appropriate research and evidence.

 

VI.       Track Record: Use this section to persuade the lender that you are credit-worthy. You must:


A.      Convincingly argue that your organization is on solid financial footing, and thus at a low risk for default, supporting your argument recent with appropriate financial statements, ratios, and other indicators of financial performance and health.

 

B.      Convincingly argue for your organization’s trustworthiness, providing credible evidence of legal and ethical financial behavior. For example, this might include recent audit results; credit history; absence of significant lawsuits, recalls, or regulatory judgments; or other evidence designed to show that the company holds itself to the highest legal and ethical standards.

 

VII.       Questions and Answers: End your proposal by constructing a persuasive, evidence-based question-and-answer section that addresses additionalfinancial questions you think the loan committee might ask, including legal and ethical concerns and why the loan would be attractive to the bank.

 

 

Milestones

 

Milestone One: Investment Project and Justification (Parts A and B)

 

In Module Four, you will submit a draft of Section II (Investment Project) and Section III (Justification), Parts A and B only, of the final project. Submit 8-10 pages of narrative, building on the narrative you began in the Module Three executive memo short paper. Include references to past financial results, growth rates, and other financial ratios as exhibited in the spreadsheet you created in Module Two, and end with appropriate reference citations. This milestone is graded with the

 

Milestone One Rubric.

 

Milestone Two: Risks

 

In Module Six, you will submit a draft of Section IV (Risks) of the final project. Analyze internal and external risks and discuss how they might affect your financial estimates and how you might plan for such risks. You will assess the microeconomic factors that affect decisions about the proposed investment, and you will analyze alternative financial scenarios. This milestone is graded with the Milestone Two Rubric.

 

Milestone Three: Justification (Part C), Financing, and Track Record

 

In Module Seven you will submit a draft of Section III Part C (Justification), Section V (Financing), and Section VI (Track Record) of the final project. You will discuss the project’s most likely financial implications and the consolidated financial projection with and without the project; compare the proposed loan to alternative financing methods by weighing the pros and cons of raising money internally versus seeking funding through global capital markets; and assess the viability of a business combination as a mechanism for expanding into the new market. You will also use this section to persuade the lender that your company is credit-worthy by presenting appropriate financial information and by providing evidence of your company’s legal and ethical behavior. This milestone is graded with the Milestone Three Rubric.

 

Final Submission: External Capital Funding Proposal

 

In Module Nine, you will write Section I (Executive Summary) and Section VII (Questions and Answers) of your final project and submit your final external capital funding proposal. It should be a complete, polished artifact containing all of the critical elements of the final project. It should reflect the incorporation of feedback gained throughout the course. This submission will be graded using the Final Project Rubric (below).


Deliverables

Milestone

Deliverable

Module Due

Grading

 

 

 

 

One

Investment Project and Justification (Parts A and B)

Four

Graded separately; Milestone One Rubric

 

 

 

 

Two

Risks

Six

Graded separately; Milestone Two Rubric

 

 

 

 

Three

Justification (Part C), Financing, and Track Record

Seven

Graded separately; Milestone Three Rubric

 

 

 

 

 

Final Submission: External Capital Funding Proposal

Nine

Graded separately; Final Project Rubric (below)

 

 

 

 


Final Project Rubric

 

Guidelines for Submission: Your Investment Funding Proposal should be approximately 15-20 pages in length (excluding title page, table of contents,spreadsheets and other exhibits, and list of references). It should be double spaced with 12-point Times New Roman font and one-inch margins. Use APA format for references and citations.

 

Instructor Feedback: This activity uses an integrated rubric in Blackboard. Students can view instructor feedback in the Grade Center. For more information,review these instructions.

 

Critical Elements

Exemplary (100%)

Proficient (90%)

Needs Improvement (70%)

Not Evident (0%)

Value

Executive Summary

Meets “Proficient” criteria and

Briefly summarizes the key points

Summarizes key points of

Does not summarize key points of

2

 

response is especially convincing,

of proposal, giving audience the

proposal, but summary is lengthy,

proposal

 

 

engaging, and/or well suited for

most essential information while

omits essential information,

 

 

 

target audience

convincing them to read further

contains inaccuracies, or does not

 

 

 

 

 

induce the audience to read

 

 

 

 

 

further

 

 

Investment Project:

Meets “Proficient” criteria and

Describes investment project,

Describes investment project, but

Does not describe investment

5.33

Describe

provides target audience with an

providing sufficient detail to give a

description lacks detail, contains

project, providing sufficient detail

 

 

especially clear and complete

firm sense of the parameters of

inaccuracies, or omits key

to give a firm sense of the

 

 

understanding of project and

activity, market need, and relevant

information on parameters,

parameters of activity, market

 

 

alternatives for evaluating success

financial metrics for determining

market need, and relevant

need, and relevant financial

 

 

 

success

financial metrics for determining

metrics for determining success

 

 

 

 

success

 

 

Investment Project:

Meets “Proficient” criteria and

Specifies resources required,

Specifies resources required,

Does not specify resources

5.33

Resources

response is particularly

including amount of loan and

including amount of loan

required

 

 

comprehensive and well aligned

other physical and financial

requested, other physical and

 

 

 

with needs of expansion project

resources, along with where

financial resources, and where

 

 

 

 

resources will come from

resources will come from, but

 

 

 

 

 

response contains inaccuracies or

 

 

 

 

 

omits key details

 

 

Investment Project:

Meets “Proficient” criteria and

Determines when project will

Determines when project will

Does not determine when project

5.33

Time Frame

suggested time frame and metrics

start, anticipated economic life,

start, anticipated economic life,

will start, anticipated economic

 

 

are especially appropriate given

and exit process, justifying choices

and exit process, justifying choices

life, and exit process, justifying

 

 

diverse alternatives and needs of

with appropriate financial metrics

with financial metrics, but

choices with financial metrics

 

 

specific project

 

response contains inaccuracies,

 

 

 

 

 

omits key details, or financial

 

 

 

 

 

metrics are not appropriate

 

 


Justification: Why Now

Meets “Proficient” criteria and

Evaluates why now is a good time

Evaluates why now is a good time

Does not evaluate why now is a

5.33

 

demonstrates especially keen

for this investment in the global

for this investment in the global

good time for this investment in

 

 

insight into the range of external

context, citing specific external

context, citing specific external

the global context, citing specific

 

 

factors that might impact global

factors that might affect business

factors, but response contains

external factors that might affect

 

 

business activities and how they

financial decisions in justifying

inaccuracies, omits key details, or

business financial decisions in

 

 

would do so

response

links to business financial

justifying response

 

 

 

 

decisions are tenuous

 

 

Justification: Strategic

Meets “Proficient” criteria and

Persuasively argues how the

Argues how the investment aligns

Does not argue how the

4

Fit: Priorities

response is particularly insightful

investment aligns with the

with the company’s organizational

investment aligns with the

 

 

and well suited for convincing

company’s organizational and

and financial priorities, supported

company’s organizational and

 

 

target audience to grant funding

financial priorities, supported by

by evidence, but argument is

financial priorities, supported by

 

 

request

evidence from company reports

cursory, illogical, contains

evidence from company reports

 

 

 

and financial statement analysis

inaccuracies, or is poorly

and financial statement analysis

 

 

 

 

supported by evidence and sound

 

 

 

 

 

financial analysis

 

 

Justification: Strategic

Meets “Proficient” criteria and

Assesses how the project fits

Assesses how the project fits

Does not assess how the project

5.34

Fit: Microeconomic

demonstrates especially strong

within the global microeconomic

within the global microeconomic

fits within the global

 

 

insight into which microeconomic

environment, supported by

environment, supported by

microeconomic environment

 

 

factors are most relevant in

evidence

evidence, but response is cursory,

 

 

 

determining strategic fit

 

poorly supported, contains

 

 

 

 

 

inaccuracies, or links between

 

 

 

 

 

microeconomic factors and

 

 

 

 

 

project are tenuous

 

 

Justification: Strategic

Meets “Proficient” criteria and

Evaluates how project builds on

Evaluates how project builds on

Does not evaluate how project

5.33

Fit: Comparative

response is especially nuanced

organization’s core competencies

organization’s core competencies

builds on organization’s core

 

Advantage

and well-aligned with strategic

and comparative advantage in

and comparative advantage in

competencies and comparative

 

 

needs of project

explaining why the project makes

explaining why the project makes

advantage

 

 

 

sense strategically

sense, but response is cursory,

 

 

 

 

 

contains inaccuracies or is only

 

 

 

 

 

tangentially related to strategic fit

 

 

Justification: Financial

Meets “Proficient” criteria and

Projects expansion’s incremental,

Projects cash benefits and

Does not project expansion’s

5.33

Impact: Expansion

response demonstrates a nuanced

annual, and cumulative cash

outflows over specified time

incremental, annual, and

 

 

understanding of the

benefits and outflows over

period, using relevant

cumulative cash benefits and

 

 

microeconomic and financial

specified time period, using

presentation vehicle and justifying

outflows over specified time

 

 

principles that underlie business

relevant presentation vehicle to

assumptions and methodology,

period

 

 

projections

support narrative and justifying

but response contains

 

 

 

 

assumptions and methodology

inaccuracies, omits key details, or

 

 

 

 

based on sound microeconomic

is poorly grounded in

 

 

 

 

and financial principles

microeconomic and financial

 

 

 

 

 

principles

 

 


Justification: Financial

Meets “Proficient” criteria and

Develops consolidated financial

Develops consolidated financial

Does not develop consolidated

5.34

Impact: Consolidated

projections demonstrate

projection for overall business

projection for overall business

financial projection for overall

 

 

especially keen insight into the

with and without the proposed

with and without the proposed

business with and without the

 

 

short and longer-term financial

investment over specified time

investment over specified time

proposed investment over

 

 

impact of the expansion on the

period, using relevant

period, using relevant

specified time period

 

 

company’s overall performance

presentation vehicle to support

presentation vehicle and

 

 

 

 

narrative and describing relevant

describing assumptions, but

 

 

 

 

assumptions

response contains inaccuracies or

 

 

 

 

 

omits key details

 

 

Risks: Internal

Meets “Proficient” criteria and

Projects how company’s most

Projects how company’s most

Does not project how company’s

5.33

 

demonstrates especially keen

significant internal risks and

significant internal risks and

most significant internal risks and

 

 

insight into the links between

opportunities might affect

opportunities might affect

opportunities might affect

 

 

internal risks and opportunities,

financial estimates and how they

financial estimates and how they

financial estimates and how they

 

 

financial projections, and planning

will be addressed, supported by

will be addressed, supported by

will be addressed

 

 

for business expansion

specific examples

specific examples, but response

 

 

 

 

 

contains inaccuracies, omits key

 

 

 

 

 

details, or links between

 

 

 

 

 

projections and planning are

 

 

 

 

 

tenuous

 

 

Risks: External

Meets “Proficient” criteria and

Evaluates how significant external,

Evaluates how significant external,

Does not evaluate how significant

5.34

 

demonstrates particularly keen

non-financial risks that might

non-financial risks that might

external, non-financial risks that

 

 

insight into how external risks

affect project success will be

affect project success will be

might affect project success will

 

 

affect project success and

addressed, giving specific

addressed, giving specific

be addressed

 

 

financial decisions

examples

examples, but response contains

 

 

 

 

 

inaccuracies, omits key details, or

 

 

 

 

 

examples are not relevant

 

 

Risks: Microeconomic

Meets “Proficient” criteria and

Assesses the microeconomic

Assesses the microeconomic

Does not assess the

5.33

 

assessment is especially is

factors that might affect decisions

factors that might affect decisions

microeconomic factors that might

 

 

especially nuanced and well

about the proposed investment,

about the proposed investment,

affect decisions about the

 

 

aligned with strategic needs of

supported by specific examples

supported by specific examples,

proposed investment

 

 

project

 

but response contains

 

 

 

 

 

inaccuracies, omits key details, or

 

 

 

 

 

examples are not relevant

 

 


Risks: Alternate

Meets “Proficient” criteria and

Projects how financial

Projects how financial

Does not project how financial

5.33

Financial: Sales Fall

discussion of implications for

performance would change if

performance would change if

performance would change if

 

 

planning and financial

sales fall 20% short of or are 20%

sales fall 20% short of or are 20%

sales fall 20% short of or are 20%

 

 

performance is particularly

higher than base assumption,

higher than base assumption,

higher than base assumption

 

 

nuanced and well supported

including what analysis of two

including what analysis implies for

 

 

 

 

scenarios implies for the proposed

the proposed investment, but

 

 

 

 

investment, justifying response

response contains inaccuracies,

 

 

 

 

 

omits key details, or is poorly

 

 

 

 

 

justified

 

 

Risks: Alternate

Meets “Proficient” criteria and

Assesses what net present value,

Assesses what net present value,

Does not assess what net present

5.34

Financial: Time Value of

demonstrates keen insight into

internal rate of return, and

internal rate of return, and

value, internal rate of return, and

 

Money

how diverse scenarios and

payback values from base and

payback values from base and

payback values from base and

 

 

financial metrics affect project

sales variation scenarios imply for

sales variation scenarios imply for

sales variation scenarios imply for

 

 

projections and subsequent

the proposed investment,

the proposed investment,

the proposed investment

 

 

business decisions

including how time value of

including how time value of

 

 

 

 

money affects calculations and

money affects calculations and

 

 

 

 

analysis

analysis, but response contains

 

 

 

 

 

inaccuracies or omits key details

 

 

Financing: Global

Meets “Proficient” criteria and

Weighs pros and cons of raising

Weighs pros and cons of internal

Does not weigh pros and cons of

5.34

Capital Markets

assessment is particularly

money using internal financing

financing versus global capital

raising money using internal

 

 

nuanced and relevant to the

versus global capital market

market mechanisms, identifying

financing versus global capital

 

 

specific needs of the expansion

mechanisms, identifying viable

viable alternatives based on

market mechanisms

 

 

 

alternatives based on appropriate

research and evidence, but

 

 

 

 

research and evidence

response contains inaccuracies,

 

 

 

 

 

omits key details, or research and

 

 

 

 

 

evidence are not relevant or

 

 

 

 

 

cursory

 

 

Financing: Business

Meets “Proficient” criteria and

Assesses the viability of a business

Assesses the viability of a business

Does not assess viability of a

5.33

Combination

assessment is particularly

combination as a mechanism for

combination as a mechanism for

business combination as a

 

 

nuanced and relevant to the

expanding into the new market,

expanding, supported by research

mechanism for expanding into the

 

 

specific needs of the expansion

supported by appropriate

and evidence, but response is

new market, supported by

 

 

 

research and evidence

cursory, contains inaccuracies, or

research and evidence

 

 

 

 

research and evidence are not

 

 

 

 

 

appropriate

 

 


Track Record: Financial

Meets “Proficient” criteria and

Convincingly argues that

Argues that organization is on

Does not argue that organization

4

Performance

response is particularly insightful

organization is on solid financial

solid financial footing, supported

is on solid financial footing

 

 

and well suited for convincing

footing, supported by appropriate

by financial statements, ratios,

 

 

 

target audience to grant funding

financial statements, ratios, and

and other indicators of financial

 

 

 

request

other indicators of financial

performance and health, but

 

 

 

 

performance and health

argument is cursory, contains

 

 

 

 

 

inaccuracies, or supporting

 

 

 

 

 

evidence is not credible,

 

 

 

 

 

appropriate, or convincing for

 

 

 

 

 

lenders

 

 

Track Record: Legal and

Meets “Proficient” criteria and

Convincingly argues for

Argues for organization’s

Does not argue for organization’s

4

Ethical

response is particularly insightful

organization’s trustworthiness,

trustworthiness, providing

trustworthiness

 

 

and well suited for convincing

providing credible evidence of

evidence of legal and ethical

 

 

 

target audience to grant funding

legal and ethical financial behavior

financial behavior, but argument is

 

 

 

request

 

cursory, contains inaccuracies, or

 

 

 

 

 

evidence is not credible or

 

 

 

 

 

convincing to lenders

 

 

Questions and Answers

Meets “Proficient” criteria and

Constructs persuasive, evidence-

Constructs question and answer

Does not construct question and

4

 

response is particularly insightful

based question and answer

section that addresses potential

answer section that addresses

 

 

and well-suited for convincing

section that addresses additional

loan committee questions,

additional financial questions loan

 

 

target audience to grant funding

financial questions loan

including legal and ethical

committee might ask

 

 

request

committee might ask, including

concerns and why loan would be

 

 

 

 

legal and ethical concerns and

attractive to bank, but response

 

 

 

 

why the loan would be attractive

contains inaccuracies, is not

 

 

 

 

to the bank

persuasive, or is not well-

 

 

 

 

 

grounded in evidence

 

 

Articulation of

Submission is free of errors

Submission has no major errors

Submission has major errors

Submission has critical errors

2

Response

related to citations, grammar,

related to citations, grammar,

related to citations, grammar,

related to citations, grammar,

 

 

spelling, syntax, and organization

spelling, syntax, or organization

spelling, syntax, or organization

spelling, syntax, or organization

 

 

and is presented in a professional

 

that negatively impact readability

that prevent understanding of

 

 

and easy-to-read format

 

and articulation of main ideas

ideas

 

 

 

 

 

Total

100%

 

 

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