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:

1. Calculate the firm’s WACC.
2. Prepare and analyze each planned capital expenditure.
3. 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.
4. 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.
5. 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.
6. 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:

1. Download the Capital Budgeting spreadsheet, and compute the WACC for Genesis.
2. 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.).
   
3. 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.
4. 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.
5. 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.

Complete the report include all of the calculations as appendices (5 pages)

Attachments:

genesis-wacc…..xlsx