MBA 640 Final Project Milestone Two Guidelines And Rubric ✓ Solved

MBA 640 Final Project Milestone Two Guidelines and Rubric

The final project for this course is the creation of an external capital funding proposal. Most businesses face a landscape of uncertainty and a never-ending stream of risks and opportunities. Managers must continually project the likely financial impact of decisions, make recommendations, act on those decisions, determine how to pay for them, and evaluate the costs and effectiveness of what has been done. Many decisions are short-term, routine, and operational. Others are longer-term investment decisions that require substantial new resources, such as developing new services, expanding into new geographic markets, or undertaking business combinations or spin-offs.

Each requires managers to forecast, plan, and make decisions based on a thorough understanding of both internal and external factors that can affect a company’s financial success. For the summative assessment in this course, you will prepare an external capital funding proposal for a major international investment at a publicly traded corporation. Your proposal will need to lay out what the proposed investment opportunity is, how it fits within the company’s broader mission and goals, its financial impact, and the amount being requested and why (including alternative funding mechanisms considered).

Your paper must address critical element IV, Risks, of the final project. Discuss any risks that might affect the success of the project and how you have planned for those contingencies. The risks (and opportunities) you identify should demonstrate your understanding of the company you selected, the industry, the investment project you are proposing, and your project’s country and timing. Your estimates of financial impacts will be only preliminary; you will most likely revise them in your final submission at the end of Module Nine.

Specifically, the following critical elements must be addressed:

  • Section IV Risks:
  • Internal. What are the company’s most significant internal risks and opportunities related to the project? How might they affect your financial estimates and how will you address them? Support your response with specific examples.
  • External. How will you address significant qualitative risks outside the company that might affect project success? Give specific examples. For example, how might culture or politics in the target country affect the proposed investment’s financial success? Natural disasters? How have you planned for these risks?
  • Microeconomic. Assess the microeconomic factors that might affect decisions about the proposed investment. Support your response with specific examples. For example, how competitive is the market you will be entering? How elastic is the price for your product or service?
  • Alternate financial scenarios. Use this section to discuss the sensitivity of your financial projections to different scenarios. Be sure to address:
    • a. How would your projected financial performance change if sales fall 20% short of or are 20% higher than your base assumption? What does your analysis of these two scenarios imply for the proposed investment? Justify your response.
    • b. What do the net present value, internal rate of return, and payback values from your base scenario and the sales variation scenarios above imply for the proposed investment? Be sure to explain how the time value of money affects your calculations and analysis.

Your risk assessment paper should be approximately 8-10 pages in length (excluding any tables, other exhibits, and list of references as necessary). It should be double-spaced with 12-point Times New Roman font and one-inch margins, and should use APA format for references and citations.

Paper For Above Instructions

In today’s volatile economic climate, effectively managing risks is crucial for the successful implementation of any investment project. This report evaluates the various risks associated with the external capital funding proposal for a major international investment in [Company Name], addressing internal and external risks, microeconomic factors, and the impact of alternate financial scenarios. The project aims to [briefly describe the investment proposal and its context].

Internal Risks

Internal risks refer to the factors within the organization that can impact the financial projections and overall success of the investment project. [Company Name] may face several internal challenges, including operational inefficiencies, insufficient financial resources, and resistance to change from employees. For instance, if the company lacks the necessary workforce training and development, it might encounter difficulties in executing the proposed investment plan effectively. To mitigate this risk, the company must invest in employee training programs and foster a culture of adaptability to ensure that staff are prepared to meet new challenges.

Additionally, potential management conflicts or misalignment of the project with the corporate strategy could hinder progress. It is essential for the management team to communicate a clear vision and establish detailed project milestones to align efforts across departments. Proper planning and ongoing monitoring will minimize the impact of such internal risks on the investment's financial estimates.

External Risks

External risks encompass factors outside the organization that can adversely affect project outcomes. Specifically, the political and cultural landscape in the target country plays a pivotal role in determining the success of the investment. Changes in government policies, regulations, or economic stability can significantly impact financial projections. For instance, if the host country enacts restrictive trade policies or experiences political unrest, it could negatively influence the project's profitability. To address these external risks, it is imperative to conduct thorough research on the political climate and develop contingency plans to adapt to potential changes.

Natural disasters also pose a threat to the project's viability. If the selected geographic area is prone to flooding or earthquakes, the project’s infrastructure could be jeopardized. Therefore, comprehensive risk assessments should take into account environmental factors, and insurance strategies must be explored to safeguard against such eventualities.

Microeconomic Factors

The microeconomic environment significantly influences investment decisions. A thorough analysis of the market dynamics is essential. For example, if the market for [specific product or service] is highly competitive, price elasticity will be a critical factor for the project's success. In such situations, understanding customer preferences and behaviors is vital. Should demand for the product be less elastic, it might indicate that consumers will remain loyal to the company despite price fluctuations. Conversely, if demand is highly elastic, a slight increase in prices may lead to a substantial drop in sales.

In addition to market competition, assessing the local labor market and supplier capabilities is crucial. A skilled labor pool is necessary for effective project execution. If skill shortages exist, this could lead to increased costs and project delays. Evaluating potential suppliers' reliability is also paramount, as disruptions in the supply chain could derail the project timeline and quality standards.

Alternate Financial Scenarios

Conducting sensitivity analysis for different sales scenarios is crucial for understanding the investment’s financial performance. If the projected sales fall 20% short of expectations, the overall profitability could be severely impacted. This decline could lead to a greater reliance on external funding and increased operational costs, creating a financial strain on the company. Conversely, if sales exceed projections by 20%, the additional revenue would enhance the company's financial performance, allowing for reinvestment in further growth strategies.

Analyzing the net present value (NPV), internal rate of return (IRR), and payback period will provide insights into the financial viability of the proposed investment. The time value of money plays a crucial role in these analyses, as it allows for examining the current value of future cash flows. For example, if the estimated NPV is positive, it indicates that the projected inflow exceeds the outflow when considering the discounted cash flow. On the other hand, a negative NPV would suggest reconsidering the investment.

Conclusion

In conclusion, addressing the various risks associated with the external capital funding proposal is vital to its success. Understanding internal and external challenges, as well as assessing microeconomic factors, enables [Company Name] to create a robust strategy to safeguard against potential pitfalls. By employing thorough financial analyses through sensitivity scenarios, the company can better prepare for uncertainties that may arise, reinforcing its decision-making framework as it pursues this significant investment opportunity.

References

  • Author Last Name, First Initial. (Year). Title of Book. Publisher.
  • Author Last Name, First Initial. (Year). Title of Article. Journal Name, Volume(Issue), Page Range.
  • Author Last Name, First Initial. (Year). Title of Webpage. Website Name. URL
  • Author Last Name, First Initial. (Year). Title of Report. Organization Name.
  • Author Last Name, First Initial. (Year). Title of Article. Retrieved from URL.
  • Author Last Name, First Initial. (Year). Title of Book. Publisher.
  • Author Last Name, First Initial. (Year). Title of Article. Journal Name, Volume(Issue), Page Range.
  • Author Last Name, First Initial. (Year). Title of Webpage. Website Name. URL
  • Author Last Name, First Initial. (Year). Title of Report. Organization Name.
  • Author Last Name, First Initial. (Year). Title of Article. Retrieved from URL.

Related Assignments