Assignment: Project Financing
Module Readings
Complete the following readings early in the module:
• Module overview
• From your course textbook, The portable MBA in finance and accounting, 4th, read the following chapters:
o Business Planning
o Business Valuation
o Profitable Growth by Acquisition
o Outsourcing
Module Overview
Business Strategy, Investment, and Financial Decisions
Imagine taking a trip with no prior planning. Following will be some of the major concerns:
• Where will you go?
• How will you get there?
• What will you do there?
• Where will you stay?
• How much money will you need?
Effective planning is the key to answer these questions and to have a successful trip. A start-up or an existing company faces similar concerns while managing its operations.
In this module, you will discover the components that are necessary for an effective planning process. You will also be introduced to sources of funding and the way management decides on funding a new project and evaluates the introduction of a new product or service.
Module Conclusion
In a previous module, you learned about the concept of planning. One of the primary objectives of planning is developing a strategy to reach the company's short- and long-term goals.
Financing is an essential component of the planning process. Financing decisions start with addressing questions such as how much financing will be needed to develop and introduce a new product. The answer depends on understanding the product life cycle and understanding how the product is expected to move through the cycle, depending on the industry. Once the foundation is determined, the next question is to determine what type of financing would be most appropriate.
In this module's assignments, you will demonstrate your understanding of the necessary aspects of a business plan. You will also consider and evaluate the considerations necessary to determine a business form.
Instructions
Investing in products and services should produce returns so that stockholders, stakeholders, and others are interested in the organization.
In this assignment, you will learn about a new product or service.
Tasks:
For Assignment Titled: ("Understanding the Numbers for Better Decisions"), you chose a publicly-traded company and analyzed its financial statements. Use that company to do the following:
1. Identify a new product or service-either recently rolled out or about to be rolled out-in the company you chose in Assignment Titled:("Understanding the Numbers for Better Decisions") (Note: Information about new products or services can be found on a company's website or in the management's discussion and analysis section of the company's annual report.If you cannot locate a new product or service introduced by the company please invent something.)
2. Analyze the quality of the company's existing products or services. Try answering the following questions about returns on the new product or service of your choice.
o What is the return on equity earned by the company? Based upon this return, is the company picking good products or services?
o What is the return on capital earned by the company? Based upon this return, is the company picking good products or services?
3. Discuss how the company financed the initiative and why it was perceived to be advantageous. To answer this question, you might want to look at the following:
o How sensitive has this company's value been to changes in macro-economic variables such as interest rates, currency movements, inflation, and the economy?
o How sensitive has this company's operating income been to changes in the same variables?
o How sensitive is the sector's value and operating income to the same variables?
Format your assignment according to the following formatting requirements:
1. The answer should be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides.
2. The response also include a cover page containing the title of the assignment, the student's name, the course title, and the date. The cover page is not included in the required page length.
3. Also Include a reference page. The Citations and references should follow APA format. The reference page is not included in the required page length.