New Heritage Doll Company – Capital Budgeting Harvard Business School – Case 4214 The New Heritage Doll Company’s production division has been has given the responsibility of evaluating two proposals for new projects. The first project expands on a current “Match My Doll Clothing Line”, and the second involves creating a fully customized doll under the “Design Your Own Doll” proposal. Proposal Backgrounds Match My Doll Clothing Line Expansion (MMDCLE) The Match My Doll Expansion includes
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Case Study admin | April 3, 2013 Case Study Acting as the CEO of New Heritage Doll company and need to decide which investment projects can create values for shareholders’ wealth so that the company can receive funding in the next five years. Student’s task is to evaluate proposed projects using the financial and qualitative information provided and to select projects to be approved for a given year’s investment plan using any evaluation criteria deem appropriate. Students are to submit the simulation
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Walk Philadelphia, PA 19122 New Heritage Doll Company: Capital Budgeting Production Division Proposal Recommendation October 25, 2011 Prepared For: Jonathan Scott, President Emily Harris, Vice President Prepared By: Dylan Baird Brittany Brantley David Hamme Executive summary: Given the assumptions available to New Heritage for the forecast of their Match My Doll Clothing line (MMDC) and their Design Your Doll(DYOD) product line, we suggest New Heritage to proceed with MMDC. Despite
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New Heritage Doll (NHD) 1) Briefly discuss one aspect of the “capital budgeting process” at NHD that you believe may be problematic. Focus on the process as described in the case. The aspect of the capital budgeting process at NHD which could be problematic is the open nature of projects which are deemed to have a perpetual return. While the discount rate determination is also open to interpretation, there are only 3 options provided, and each can be run as a sensitivity analysis. For
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Liacouras Walk Philadelphia, PA 19122 New Heritage Doll Company: Capital Budgeting Production Division Proposal Recommendation October 25, 2011 Prepared For: Jonathan Scott, President Emily Harris, Vice President Prepared By: Dylan Baird Brittany Brantley David Hamme Executive summary: Given the assumptions available to New Heritage for the forecast of their Match My Doll Clothing line (MMDC) and their Design Your Doll(DYOD) product line, we suggest New Heritage to proceed with MMDC. Despite less
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New Heritage Doll Company: Capital Budgeting The New Heritage Doll Company’s Vice-President of Production, Emily Harris, had to decide which of two proposals she should approve for the company’s upcoming capital budgeting meetings. The first project involved expanding an existing “Match My Doll Clothing” line, which had a proven record of success in the past. The second project introduced a new initiative called “Design Your Own Doll”, which used a web-based software enabling users to customize
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New Heritage Doll Company Capital Budgeting Analysis The New Heritage Doll Company is a company that makes dolls for children between the ages 3 – 12 years. The company has revenues of 245 million USD and an operating profit of 24 million USD. The company has three major divisions – The Retailing division, the Licensing division and the Production division. The head of the production division has to choose between two capital intensive projects that have been presented to her - the “Make My Doll
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New Heritage Doll Company: Capital Budgeting Case The key issue in the case is which of one of the two projects recommended by the Production Division should the company pursue (if any). Below is the summary of the NPV analysis done for both the Match My Doll Clothing (MMDC) and Design Your Own Doll (DYOD) As seen above the NPV for the MMDC project is $9.587 million and the NPV for the DYOD is $4.833 million. Analysis: Even though the NPV for the DYOD is lower than MMDC, it may be advisable
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Net Present Value and Capital Budgeting Course Module in Introductory Finance Course Modules help instructors select and sequence material for use as a part of a course. Each module represents the thinking of subject matter experts about the best materials to assign and how to organize them to facilitate learning. Each module recommends four to six items. Whenever possible at least one alternative item for each main recommendation is included, as well as suggested supplemental readings that
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New Heritage Doll New Heritage Doll Company: Capital Budgeting MGT 6060 20 September 2011 Overview Two business proposals from the Production division of the New Heritage Doll Company are being considered for submission to the capital budgeting committee. Only one proposal will be submitted. The proposals are: Match My Doll Clothing Line Expansion and Design Your Own Doll. A systematic process will be used to determine which proposal to recommend. Criteria Include: 1. Comparison of the business
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