1. ARGOSY B6022 Module 5 Assignment 2
Genesis Energy Capital Plan Report NEW
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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.
2. 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.
3. 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:
4. Download 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.
5. 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 report should include all of
your calculations as appendices (5 pages, or 1
page for each project).
Part II—Executive Summary Presentation
6. 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 68
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.
7. Develop a 10-12-slide presentation in
PowerPoint format. Apply APA standards to
citation of sources. Use the following file
naming convention:
