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Name: ________________________
Write a report (about 5 pages) on the following:
- What types of project did New Heritage have? Characterize them by division and project attributes.
New Heritage’s projects could be classified into three categories based on division (production, retail and licensing) and by the project attributes of risk level, lifetime project costs, payback period, NPV, IRR and profitability index. I used these project types and characteristics to group the projects and decide which were the best projects to invest in.
- Generally which collection of funded project do you expect to be associated with good overall performance?
In general, I would expect the licensing projects, especially those with low to medium risk, high net present value , low lifetime project costs and a short payback period, to be associated with good overall performance. This is because licensing projects, based on New Heritage Doll Company’s Financial Snapshot, have historically been the main driver of cash flow and operating profit. In addition, less risky and higher-NPV projects have been empirically proven to be associated with good overall performance.
- How much is your final APV?
My final APV is 611.37.
- Display your decision history.
My decision history is displayed in the table below:
NPV |
IRR |
PI |
Pay Bk Yrs |
Life time Prj. Costs |
2014 Prj. Costs |
1 Yr. EBITDA |
5 Yr. EBITDA |
|
Dollhouses with Miniature Dolls |
9.09 |
27.06% |
2.65 |
7.74 |
4.73 |
3.43 |
-0.80 |
5.70 |
New East Coast Distribution Facility |
6.30 |
18.91% |
0.63 |
4.92 |
16.00 |
10.00 |
0.00 |
1.00 |
Coupon Promotion/Frequent Shopper Campaign |
6.04 |
25.16% |
X.XX |
7.99 |
5.63 |
X.XX |
-X.XX |
1.XX |
XXXXX XXXXXXX Book Series |
8.15 |
97.95% |
XX.XX |
X.XX |
1.38 |
0.XX |
-X.63 |
2.00 |
Cable XX XXXXXXX |
X.52 |
33.XX% |
X.70 |
5.XX |
X.XX |
X.75 |
-X.XX |
0.XX |
Toddler Doll XXXXXXXXX XXXX |
X.15 |
XX.06% |
XX.79 |
8.70 |
3.14 |
0.00 |
1.XX |
X.37 |
XXXXX my XXXX' XXXXXXXX XXXX |
X.XX |
XX.XX% |
1.XX |
X.21 |
5.57 |
0.XX |
1.XX |
5.XX |
XXXXX XX XXX XXXXX' Initiative |
6.XX |
XX.XX% |
1.XX |
9.93 |
7.XX |
X.00 |
X.XX |
X.61 |
Grow With Me' XXXX XXXX |
X.XX |
18.52% |
X.04 |
&XX; 10 |
9.15 |
X.04 |
X.XX |
X.40 |
XXXXXXX XXXXXXXX XXXXXXXXX at Sacramento XXXXXXXX |
0.06 |
XX.64% |
0.XX |
X.08 |
X.XX |
X.XX |
X.XX |
X.XX |
Match My Doll' Clothing XXXX, Expansion XX XXXXXXX |
8.XX |
26.XX% |
2.75 |
X.XX |
4.XX |
X.01 |
1.15 |
3.XX |
EDI XXXXXXXX XXXXXXXX System |
X.05 |
XX.76% |
X.XX |
X.XX |
0.05 |
X.01 |
-0.01 |
0.11 |
XXXXXX Your Own Doll' |
X.XX |
XX.XX% |
X.XX |
X.XX |
X.99 |
X.00 |
X.00 |
4.40 |
XXXXXX Store XXXXXXXXX in Northeast |
5.XX |
46.XX% |
- |
5.XX |
X.29 |
1.XX |
1.XX |
3.XX |
Warehouse Facility XXXXXXXXXXXXX |
2.76 |
14.26% |
X.XX |
8.XX |
10.50 |
X.00 |
1.XX |
3.75 |
XXXXXXXXX of XXXX-order Catalog XXXXXXXX XX XXXX |
1.XX |
19.77% |
2.85 |
> XX |
2.XX |
X.XX |
X.24 |
0.68 |
Virtual XXXX Community |
6.XX |
XXX.58% |
266.50 |
X.XX |
X.18 |
X.XX |
X.XX |
X.XX |
Bookstore XXXX XXX Writers' Club |
6.71 |
XX.90% |
XX.XX |
4.44 |
X.50 |
0.XX |
X.XX |
X.62 |
New XXXX Film/DVD |
9.37 |
238.61% |
-3.XX |
1.XX |
3.XX |
X.XX |
4.XX |
XX.85 |
XXXXX XXXX Series |
6.14 |
43.57% |
XX.XX |
5.XX |
1.61 |
0.XX |
0.XX |
0.XX |
† XXXXXXXXXXX of XXXXXXXX's Magazine |
24.08 |
18.26% |
0.XX |
X.XX |
XX.XX |
0.00 |
X.XX |
22.XX |
XXXXXXXX Music CD Series |
6.97 |
XXX.99 |
XX.XX |
2.09 |
1.XX |
X.01 |
0.52 |
X.XX |
- How do you XXXXXX XXX XXXXXXXX that you XXXXX XXXX to XXXXXX? What XXXXXXX budgeting decision XXXXXXXX did you XXX?
I selected the XXXXXXXX to XXXXXX in XXXXX XXX XXXXXXXX Doll Company’s XXXXXXXXXX performance, and XXX XXX, risk level, XXXXXXX period XXX XXXXXXXXX XXXXXXXX costs of each project. XX terms of category, I also XXX a XXXXXXXXXX toward licensing, because while XXX strongest XXXXXXX XXXXXX comes XXXX XXXXXX (XXX XXXXXXX, vis a XXX Production’s 125 XXXXXXX and XXXXXXXXX’s 24.5 million), the strongest XXXX flow and operating XXXXXX XXXXXX comes, on the other hand, XXXX licensing (14.XX XXXXXXX from licensing in XXXXXXXXX XXXXXX in 2009). Licensing XX also an XXXXX-XXXXX division, XXXXX prevents the XXXXXXX XXXX XXXXXX to XXXXXX XXX heavy in XXXXXX. In terms XX project attributes, XXX budgeting XXXXXXXX XXXXXXXX I XXXX XXX XX XXXXXX a project XXXXX had a high XXX, XXX XX medium risk XXXXX (although I did make several XXXXXXXXXX XXX XXXXXXXX XXXXXXXX XXXX a high XXXX XXXXX XXXX I XXXX that the NPV XXXXXXXXX a higher risk XXXXX), reasonable XXXXXXX period and XXXXXXXXXX XXXXXXXXX lifetime XXXXX. I optimized XXXXX XXXXXXXX XXX each XXXXX XXX chose XXX best possible projects, XXXXXXX in mind the XXXXXX XXXXXXXXXX XXX each round.
- When two projects are XXXXXXXX XXXXXXXXX, how did you XXXXXX the XXXXXXX? XXXX XXXXXXX XXXXXXXXX XXXXXXXX criteria did you use?
Mutually XXXXXXXXX XXXXXXXX refer XX XXXXXXXX which XXXXXX XXXX XX XXXXXX, for reasons of strategy, budget XXXXXXXXXX or operational limitations. XXX example XX XXXX XXX the acquisition of Children’s Magazine XXX XXX XXXXXXXXXXX XX Electronic Toy XXXXXXXXXXXX. The New Heritage XXXX Company’s board XX XXXXXXXXX XXX XXXXXXXX XXX XXXXXXXXX for acquisitions, XXXXX XXXX XX XX XXXXXXX intensive, XXXX XXXX XXXXXXXXX, and XXX XXXXXXX that New XXXXXXXX XXXXX XXX successfully execute more than XXX XXXXXXXXXXX XXX year. In this XXXX, XXX capital budgeting decision XXXXXXXX I XXXX XXX to look XX which acquisition had a higher XXX present XXXXX (XXX), lower risk level and XXXXXX XXXXXXXXXXXXX XXXXX, XX XXXX XX which project fit XXXX appropriately XXXX XXX XXXXXXXXX XXXX outlined by XXX Heritage XXXX XXXXXXX. In XXXX XXXX, it was clear XXXX the acquisition of the XXXXXXXX’s XXXXXXXX was the XXXXXXXX XXXXXX XXXXXXX the XXX XXXXXXXX XXXXXXXXX projects.
- XX you use a strategy to XXXXXXXX XXXX performance? What strategy did you use?
I XXXX a strategy comprised of multiple rules. Foremost, I XXXXXXX a diversification strategy where I tried to have a mix XX XXXXXXXX XX XXXXXXXXX XXXX XXXXXX XXX round. This XXXXX that each round featured a XXX XX low, XXXXXX XXX high XXXX projects, although XXXX projects XXXX XXXXXXXXXX XXXX levels XXX XXXXXXXXX XXXX XXXXXXXX, I naturally XXXXX XXX higher NPV alternative. Secondly, I XXXXX XX choose the XXX X-5 XXXXXXXX per round in order XX XXXXXXXX capital for XXXXXX rounds, in XXXX XXXXXXXX XXXX higher NPVs XXXXXXXX in XXXXX XXXXXX. Thirdly, I XXXXX XXXXXXXX XXXXX XXXX expiring soon. XXXXXXXX, I XXXXX XX focus XX licensing because it XXXXXX in the XXXX XXXX XXXX, net income and XXXXXXXXX profit XXXXX XX New Heritage’s XXXXXX XXXXXXXXXX XXX balance XXXXXX. XXXXXXX, I went XXXX XXXXXXXX with XXX XXXXXXX XXX XXXXXX XXXX XXXXXXX XXX XX NPV XX the XXXXXXXXXXX superior XXXXXXX XXXXXXXXXX metric, XXXXX that it accounts XXX XXXXXXXXX XXXXXXXX XXXXX over time, and XXXXX definitively whether a XXXXXXX XX value XXXXXXXX or XXXXX XXXXXXXXXX. On XXX XXXXX XXXX, the XXXXXX XXX XX XXX basic, XXX does XXX account XXX XXXXXXXXX cash XXXXX, or cash flows XX XXXXXXXXX discount XXXXX. XX a XXXXXX, I XXX able XX XXXXXXX a XXXXXXXXXXXX XXX at the XXX of the XXXXXXXXXX XXXX.
- XXXXXXXX the student XXXXXX.
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Appendix: XXXXXXXXXXX Results XX Capital XXXXXXXXX XXXXXXXXXX XXXX.
2013
X. XXXXXXXXXX with Miniature Dolls XXXX project launched successfully but with somewhat lower XXXXXXX than XXXXXXXX, XXXXXXXXXXXX XX higher XXXXXXXXXX and marketing costs.
2. XXX XXXX XXXXX Distribution Facility This XXXXXXXX was XXXXXXXXX and performing XX expected.
X. Coupon XXXXXXXXX/Frequent Shopper XXXXXXXX The campaign XXX XXXXXXXXX XXX XXXX XXXXXXXX XXXXX of XXX retail division's XXXXXXX XXXXXXX.
X. Young Authors Book Series 'Best of XXXXX' XXXXX XXXX an XXXXXXXXX XXXXXXX with XXX targeted XXXXXXXXXXX. Both revenue XXX profit levels XXXXXXXX expectations.
X. Cable XX XXXXXXX Revenues XXXX XXXXXXXXX the cable TV show XXXX XXXXXXXX higher XXXX anticipated, XXX production costs XXXXXXXX expectations, XXXXXXXXX in a XXXXX operating XXXXXX
XXXX
1. XXXXXXX Assembly XXXXXXXXX at Sacramento XXXXXXXX The XXX XXXXXXXXX XXXXXXXXX as expected.
2. XXX Supplier Software XXXXXX XXX new system performed XXXXXX XXXX expected XXXX XXXXXX to XX&X XXX XXXXXXX XXXXXXX savings.
X. 'XXXXXX Your Own XXXX' : XXXXXXX costs in the XXXXX XXXX were XX XXXXXXXX but were XXX sufficient to XXX XXX XXXXXXXX XXXXXXXXX XXX related software XXXXXXX properly. Additional outlays are required to complete the XXXXXXX, and XXX launch is accordingly XXXXXXX.
X. XXXXXXX XXXX Community Development costs XXXX XXXXX XXXXX XXXXXX than XXXXXXXX, and XXXXXXXX XXXX XXXXXXXXXXXXX XXXXX, XXX XXX XXXXXXX was nevertheless XXXXXXX to be XXXXXXXXXX.
X. XXXXXXXXX XXXX and Writers' Club XXXXXXX XXXXXXXX XXXX XXX initiative were XXXXXXXX XXXXXX than expected, but XXXX XXX XXXXXX XX lower XXXXX XXXXXXX resulting XXXX a XXXXXXXX different XXXXXXX mix XXXX XXXXXXXXXXX.
X. Toddlers XXXXX XX Series Initial XXXXXXXX from XXXXXXX CDs XXXX XXXXX XX large XX anticipated.
2011
1. 'Dolls XX XXX World' Initiative Development of successful XXXXXXXXXX took XXXXXX than expected, XXXXX XXXXXXX XXXXXX by several XXXXXX and caused XX XX miss an entire holiday season. XXX initiative XX still XXXXXXXX XX XXXXXXX.
X. 'Match My Doll' Clothing XXXX, XXXXXXXXX XX Concept XXX expanded XXXXXXXX XXXX benefited from the strong XXXXXXXXXXX XX XXX initial 'Match XX XXXX' XXXX and has outperformed projections.
3. Retail Store XXXXXXXXX in Northeast XXX XXXXXXXXX XXXXXX XXXXXXXXXX generated XXXX XXXXXXX XXXX expected and were XXXXXXXXXX right XXXX.
X. Warehouse Facility Consolidation XXXXXXXXX XXXXXXXXXXXXX generated slightly XXXXXXX savings than anticipated.
5. Expansion XX Mail-order Catalog XXXXXXXX to XXXX XXXXXXXXXXXX XXX concept testing were XXXXX times higher XXXX XXXXXXXXX. XXXXXXX, XXXXXXXX were XXXXXXXX XXXX XXXXXX XXXX expected. XXXXX managers are now looking for XXXX XX speed XX penetration in Japan and XXXXX.
6. Acquisition of Children's XXXXXXXX XXX magazine's XXXX XXXXXXXXXX base has XXXX up better than XXXXXXXX, despite stiff online XXXXXXXXXXX and generally XXXX XXXXXXXXXXX XX XXXXX magazines. XXXXXXXXX performance XX consequently somewhat XXXXXXXX XXXX expected.
2010
1. 'XXXXX XX XXXX' XXXXXXXX Line The XXXXXXXX line outperformed expectations XXXXX a celebrity's XXXXXXXXX were XXXXXXXXXXXX XXXXXXX items from the XXXX XXXXXXX XXXXX XXX debut. XXXXX margin XXX XXXX higher XXXX expected XXX to XXXXX than XXXXXXXXXXX XXX-XXXXXXXXX costs.
X. 'Grow With Me' XXXX XXXX XXXXXXXXXX quality XXXXXXXX XXXXXX first-year revenues to XXXX XXXXX XX expectations by half. High XXXXXX XXXXX and XXXXX associated with reengineering a XXX electronic component raised XX&X costs XXXXXXXXXXXXX.
X. XXXXX XXXX Series The appearance XX two XXXXXX in this XXXXXX on a talk show host's recommended XXXXXX reading list XXX kids boosted XXXXXXX XXXXXX above XXXXXXXXXXXX.
2009
1. XXXXXXX Doll Accessory XXXX XXXX XXXX XX accessories performed in line XXXX expectations XXXXXXXXX XXXX sales and costs.
2. XXX Doll XXXX/XXX XXX film XXX XXXXXXXX on schedule. The XXXXXXXXX XXXXXXXX XXX very XXXXXXXXXX, XXX XXX XXXXX exceeded those of NH's previous XXXXX.
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