LASA 2—Genesis Capital Plan Report The Genesis Operat 587093

LASA 2—Genesis Capital Plan Report 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 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. 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. Using the information provided, calculate the periodic and cumulative net cash flows for each potential project and its associated options. Please note that there are 5 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 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). Write a 5–6-page report in Word format. Apply APA standards to citation of sources. Use the following file naming convention: LastnameFirstinitial_M6_A2.doc.

Paper For Above instruction

The Genesis operations management team has been tasked with developing a comprehensive capital plan for establishing a fully operational facility overseas in partnership with Sensible Essentials. This plan must go beyond mere wishful thinking; it should represent a detailed analysis of necessary expenditures, financial viability, and strategic performance metrics. Over a constrained timeline of five days, the team is expected to calculate the firm’s Weighted Average Cost of Capital (WACC), analyze each planned capital expenditure, and evaluate their benefits using pivotal investment evaluation tools: Net Present Value (NPV), payback period, and Internal Rate of Return (IRR). These tools will facilitate ranking and recommending expenditures by categories such as facility, equipment, and inspection costs, focusing on the most beneficial investment options that maximize organizational value.

To begin, the team must determine the firm's WACC, an essential metric reflecting the minimum acceptable return accounting for the cost of debt and equity financing. Using provided financial data, the WACC will be computed through the standard formula, incorporating target capital structure weights and respective costs of debt and equity. Accurate calculation of WACC ensures subsequent project evaluations accurately reflect the firm's cost of capital, establishing a baseline for assessing project viability.

The next step involves analyzing each capital expenditure. This includes detailed assessments of costs associated with building the facility, purchasing equipment 1, 2, and 3, and executing inspections. The analysis should incorporate expected cash outflows, including initial investment costs, and subsequent operational expenses, if any. Each expenditure will be scrutinized via NPV, payback period, and IRR calculations, where positive NPVs, shorter payback periods, and higher IRRs indicate more favorable investments. These evaluations are fundamental to ranking projects in order of benefit, helping management prioritize spending on initiatives that deliver the highest organizational value.

Following the analysis, expenditures must be ranked and recommended category-wise. For each grouping—such as the overall facility, individual equipment, and inspection—the team should select the most advantageous options based on the evaluation metrics. For example, among multiple configurations of equipment, the one with the highest NPV and IRR, and the shortest payback, should be favored. The comprehensive costs of establishing the full facility, incorporating all recommended components, will also be calculated, helping to determine total initial capital outlay and operational readiness.

Subsequently, the team must evaluate the completed facility’s financial performance through retrospective calculations of payback, NPV, and IRR, based on projected cash flows for operational phases. These metrics will reveal the investment’s profitability, liquidity, and return expectations, providing insights into long-term viability.

In addition to financial metrics, the project requires the development of key performance indicators (KPIs) that measure the operational success and strategic alignment of the new overseas facility. Between three and five metrics should be proposed, with at least one directly influencing dividend policy, aligning shareholder rewards with operational performance. Suitable KPIs might include return on investment (ROI), operating margin, net cash flow, return on equity, and dividend payout ratio, each serving specific strategic purposes and guiding management decisions.

The culmination of this effort involves preparing an executive summary that synthesizes all findings, analysis, and recommendations. This summary should justify the chosen investment options, costs, cash flows, and expected returns, based on the financial evaluation criteria. Additionally, a detailed report should be compiled, including all calculations as appendices—each project’s financial data and evaluation metrics—spanning approximately 5–6 pages formatted according to APA standards.

Overall, this capital planning effort streamlines resource allocation, ensures financially sound investments, and sets measurable performance standards aligned with strategic organizational goals. By meticulously analyzing project options, calculating costs and returns, and establishing performance metrics, the operations management team will deliver a comprehensive blueprint for successful overseas expansion that maximizes shareholder value and operational excellence.

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