27 Jan FIN 630 Milestone 1: Company Background & Initial Calculation
To complete the first step of this final project, you will submit a statement that identifies the New Heritage Doll Company’s mission, vision, and values as presented in the case study. How might these two projects align with the company’s stated goals? In your statement, summarize the two capital investment options and consider the legal, ethical, and/or professional standards that may be relevant. To begin, you need to do the following:
Carefully read the New Heritage Doll Company: Capital Budgeting case study.
Identify the New Heritage Doll Company’s mission, vision, and values.
Describe the main goal of the company’s capital investment, and summarize each proposed project:
Expansion of the successful “Match My Doll Clothing” line
Initiating a new “Design Your Own Doll” line
Discuss whether the projects are compatible with goals of the company.
Evaluate any apparent legal, ethical, and/or professional standards that may impact the success of these two projects.
Next, you must conduct some initial calculations, including NWC (net working capital), NPV (net present value), IRR (internal rate of return), and EBIT (earnings before interest and taxes), taking care to be accurate with your numbers. To do this, locate the necessary numbers from the case study and plug them into the Excel template to perform these method calculations. Document your results in the “Milestone One” section of each specific project tab. This section should include your NPV, IRR, and EBIT calculations for the specific project. The module resources may also be useful.
Be sure to explain the three methods and defend why they should be used in the evaluation of capital projects such as those considered by the New Heritage Doll Company. Why are these financial tools used? Support your statements using at least two scholarly articles.
Note that the course textbook will also be useful as you progress through this project. As finance students and professionals, you are also encouraged to use your own experience, understanding, and knowledge of business and industry structure to drive your analysis.
Specifically, the following critical elements must be addressed:
Background
Describe the organization, including its mission, vision, and values. Specifically, you should clearly identify any strategic objectives of your firm, as those will be important to reference in your recommendations.
Additionally, summarize the two capital investment options. Specifically, explain all legal, ethical, or professional standards that apply to both, using specific examples to illustrate.
Analysis of the Capital Investment Options
Analyze each of the projects with regard to their alignment to the mission, vision, and values of the company. Which of the two options has the strongest alignment and why?
Analyze each of the projects for their financial implications. Include your calculations and results for each of the following evaluation methods:
NPV, IRR, and EBIT
Be sure that all of your calculations are complete, accurate, and precise.
