B6022 Module 5 Assignment 2 Genesis
Energy Capital Plan Report
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The Genesis Energy 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:
- (see attachment) the Capital
Budgeting spreadsheet, and compute the WACC for Genesis Energy.
- Using
the information provided in the spreadsheet, analyze Genesis Energy’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 microsoft word 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 Energy’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. Apply
APA standards to citation of sources.
5 Pages Paper and 10-12 Slides
Presentaion Included
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