New Heritage Doll Company : Capital Budgeting

1321 WordsJun 21, 20166 Pages
New Heritage Doll Company: Capital Budgeting The New Heritage Doll Company offered a unique line of dolls as an alternative to its competitors, and it wanted to extend its brand for future growth. The company has three operating divisions: production, retailing and licensing. All three divisions planned to promote projects of their own to compete for the same limited resources. Emily Harris, vice president of the production division, had to be prepared to select one of the two project proposals from her division and come up with a compelling case to submit to the company’s capital budgeting committee. The first project proposal is Match My Doll Clothing line expansion consisted of expanding matching doll and child’s clothing and accessories. The second project proposal is Design Your Own Doll by creating customizable “one of a kind” doll features through the company’s website. The project selection criteria would base on quantitative and qualitative analysis. The quantitative analysis would base on the evaluation of discounting cash flow forecasts to determining the Net Present Value (NPV), Internal Rate of Return (IRR), and the Payback period of each proposed project. The qualitative analysis would include the potential project value of the company’s overall strategy, innovation, key project risks, and the project interdependencies to the whole company. Assumptions: The information under the Networking Capital Accounts: Cash, Accounts Receivable, Inventory, and
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