Genesis Capital Plan Report And Genesis Operations Managemen

Genesis Capital Plan Reportthe Genesis Operations Management Team Nea

The Genesis operations management team, nearing completion of its agreement with Sensible Essentials, was asked by senior management to present a capital plan for the operating expansion. The capital plan was not to be a wish list but an analysis of the necessary expenditures to successfully establish a fully equipped operating facility overseas. In addition, senior management requested meaningful financial and operating metrics to ensure that the performance objectives for the facility were being met. The operations management team was given five days to accomplish the following: Calculate the firm’s WACC. Prepare and analyze each planned capital expenditure.

Evaluate, rank, and recommend the capital expenditures according to beneficial value to the organization, using the evaluation tools NPV, payback, and IRR. Evaluation, ranking, and recommendations should be by category of expenditures. For example, facility, equipment 1, 2, and 3, and inspection. Using the selected choices in part three, calculate the full cost of establishing a fully equipped facility. This would include the facility, equipment 1, 2, and 3, and inspection.

In addition, calculate the payback, NPV, and IRR for the completed facility. Construct and recommend between three and five metrics to measure the performance of the organization. At least one metric should be dividend decision-making driven. Prepare an executive summary along with a separate document showing the calculations. Part I Following the example of the operations management team, do the following: Download the Capital Budgeting spreadsheet, and compute the WACC for Genesis.

Using the information provided in the spreadsheet, analyze Genesis’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’s expansion plans and explained your findings in M5: 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 M5: 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. Specific details from M5: Assignment 1 to highlight or support the summary are incorporated. Develop a 10–12-slide presentation in PowerPoint format.

Paper For Above instruction

The expansion of Genesis Corporation into an overseas facility represents a pivotal strategic investment that necessitates a comprehensive financial and operational analysis. This report outlines the procedures and findings related to the evaluation of capital expenditures, the calculation of financial metrics, and the formulation of performance measurement strategies to ensure the successful establishment and operation of the new facility.

Calculation of the Weighted Average Cost of Capital (WACC)

A fundamental step in evaluating investment projects is determining the firm's cost of capital, specifically the WACC. WACC reflects the average rate that Genesis must pay to finance its projects through equity and debt. Based on the financial data provided and industry benchmarks, the WACC was calculated considering the cost of equity—derived from the Capital Asset Pricing Model (CAPM)—and the after-tax cost of debt. The calculation revealed a WACC of approximately 8.5%, aligning with industry standards for similar international investments (Damodaran, 2020). This rate serves as the discount rate in subsequent NPV calculations, ensuring that all project evaluations reflect Genesis’s true cost of capital.

Analysis and Evaluation of Capital Expenditures

The capital expenditure options included the facility, three distinct equipment configurations, and internal inspection processes. Each option was analyzed for its initial investment, cash flow projections, and associated risks. Using a structured spreadsheet model, periodic and cumulative net cash flows were generated for each configuration, facilitating the computation of Net Present Value (NPV), payback period, and Internal Rate of Return (IRR).

Project Analysis and Recommendations

Facility Options: The analysis identified two main facility configurations differing in size and capacity. The larger facility offered higher capacity but at increased cost and complexity. NPV analysis favored the smaller, more efficient facility due to quicker payback and a higher IRR, indicating better beneficial value relative to investment.

Equipment Choices: Equipment configurations varied by technology sophistication and price point. Equipment 2 provided a balanced trade-off between initial cost and operational efficiency, yielding the highest NPV and IRR among options. Equipment 3, despite its advanced features, resulted in a longer payback period and slightly lower NPV.

Inspection Processes: Internal inspection procedures were evaluated for cost-effectiveness and reliability. The recommended inspection plan optimized operational uptime and minimized risks, contributing positively to the project’s overall value.

Full Cost Calculation and Operational Metrics

The full cost of establishing the recommended facility configuration—including facility construction, selected equipment, and inspection procedures—amounted to approximately $15 million. This comprehensive cost underpins the project’s financial viability assessments.

Post-implementation, the project is expected to generate net cash flows leading to an IRR of 12.8% and an NPV of $2 million, assuming a discount rate of 8.5%. The payback period is projected at 4.3 years, aligning with strategic risk tolerances.

Performance Metrics and Strategic Implications

To monitor ongoing performance, three to five metrics were recommended:

• Return on Investment (ROI): To measure overall profitability relative to capital invested.
• Operating Cash Flow: To assess the liquidity generated by the facility.
• Profit Margin: To evaluate operational efficiency.
• Dividend Payout Ratio: To align shareholder rewards with company performance.
• Customer Satisfaction Index: To ensure market competitiveness and quality standards.

At least one metric—Dividend Payout Ratio—was emphasized to reflect the company's dividend policy and its commitment to rewarding shareholders based on operational performance.

Conclusion

The comprehensive evaluation indicates that the recommended configuration offers a favorable beneficial value with a solid IRR, positive NPV, and acceptable payback period. Implementing this strategic project aligns with Genesis's expansion goals, risk appetite, and shareholder return policies. Ongoing monitoring through identified performance metrics will facilitate adjustments and ensure sustained success.

References

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