New Heritage Doll Company Capital Budgeting Case Solution

Case Solution

This case has won 2013 each Case Award. A producer and vendor of departmental doll goods must choose one of the two projects to sponsor. In order to decide, the student must project and calculate the cash flows for the two different ventures. The values obtained must be discounted to obtain present values. In addition, the student will also be required to analyze and assess the different operational procedures associated with both the ventures. The topics included in the case comprise of: Cash flow Forecasting, Internal; Rate of Return, Corporate Finance, Capital Planning, Capital Budgeting, Net Present Value, Project Valuation, Capital Rationing, and Resource Allocation.

Excel Calculations

 Working Capital Assumptions, Working Capital, Cash Flows, Free Cash Flows, PV of Cash Flows, Terminal Value, WACC, NPV, IRR, Payback Period, Discounted Payback Period

(For both projects- 1. Match My Doll Clothing Line Expansion 2. Design Your Own Doll)

Questions Covered

Comparison of the Business Cases   

Match My Doll Clothing Line Expansion   

Design Your Own Doll

NPV analysis

Internal Rate of Return

Payback Period Analysis

Discounted Payback Period Analysis

Analysis of additional information

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