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4 . 3 . Hector Gaming Company ( HGC ) is an educational gaming company specialising in young children's educational games. HGC has just completed
Hector Gaming Company HGC is an educational gaming company specialising in young children's educational games. HGC has just completed their fourth year of operation. The company is committed to
launching new monster trucks versions each April to take advantage of the summer season. HGC invited finance professors to cover capital budgeting, explaining how to calculate the NPV and IRR, and
stated that these should be used to screen potential projects and many other innovations that HGC bring into the market each year. Based on their calculation, the launching of new trucks result in the
negative NPV and very low IRR leading to the rejection of the project. However, one professor advised the project should be accepted based on its contribution to the organisation's objectives and strategic plan.
In the QandA session, the ED Wilson, the Hector Gaming Company's CFO and the government officials from the Ministry of Finance office argued in favour of nonfinancial criteria in selecting and ranking
projects and vehemently rejected the NPV and IRR approach. Fundamental analysis, Palat,
Give practical recommendations in favour of the CFO and the government officials in soliciting for nonfinancial criteria when selecting and ranking potential projects.
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