Posted: March 23rd, 2017
Evaluate, rank, and recommend a specific option for each capital project according to beneficial value to the organization, using the evaluation tools NPV, payback, and IRR.
Following the example of the operations management team, do the following:
- the Capital Budgeting spreadsheet, and compute the WACC for Genesis Energy.
- Using the information provided in the spreadsheet, analyze Genesis Energy’s project options. Then, calculate the periodic and cumulative net cash flows for each potential project and its associated options. Please note that there are five 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 the 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).
Part II—Executive Summary Presentation
Because of limited resources in an era of plentiful opportunities, companies must carefully select investments. You analyzed Genesis Energy’s expansion plans and explained your findings in M4: Assignment 1.
This assignment is based on those findings. In this assignment, you will create a PowerPoint presentation that will include the following information:
- An executive summary of your findings from M4: Assignment 1. Be sure to adhere to the following:
- The presentation should be approximately 6–8 minutes (or 10–12 slides).
- A statement of the problem or topic is included.
- A concise analysis of the findings is included