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Finance & Accounting
Pages 7 (1757 words)
Investment Projects Heritage Doll Simulation Executive Summary The New Heritage Doll Company comprises of three divisions: production, retail and licensing which were responsible for manufacturing and production, sales and licensing of the rights for the doll characters respectively.
That is why even projects which had a positive net present value where not considered for the purpose of investment. The annual investment process at New Heritage involved personnel from all the three divisions of the company who presented their proposals for projects which can be considered for the purpose of investment. The proposals included projects which can be considered for the purpose of investment. With the growth of the company, initiatives were taken to decentralize some of the project approval process and hence increase spending authority at the division level. However, some projects which were of significantly higher value and required huge source of funds were reviewed at the corporate level by the capital budgeting committee which consists of the CEO, CFO, COO, the controller and the division presidents. As such, this report involves a thorough analysis of the available investment opportunities that the New Heritage Doll Company can undertake. The analysis spans over five years (2010 - 2014), evaluating projects which can prove to be a value maximising proposition for the company. The projects were analysed on the basis of key performance measures such as Net Present Value, Internal Rate of Return, Profitability Index, Payback period, riskiness, exposure to debt so on and so forth. The projects which were chosen every year for the purpose of investment were submitted to the budgeting committee. ...
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