Fall 2020 Project Due Date: 4/3/2021 What is the project? Evaluate the financial feasibility of a new business venture of your choosing using the tools and concepts covered in this course. To evaluate the business, you will need to obtain information regarding revenues, costs, and cost of capital that you will use to estimate cash flows and cost of capital. You will most likely not find all the information you need on the internet and therefore you will have to conduct an offline research to obtain the relevant information. You can also obtain information from an an existing business that you have access to. How many students in each group? You can either work alone or in a group of 3-4 students. Males and females must not mix in a group Project Timeline 20/12/2020 Team formation: if there are students who are not already in a team after this date, they will be randomly grouped 28/12/2020 Submission of project idea: your idea must be submitted to and approved by the TA. If your idea is submitted after this date, you will be deducted 1 point. - 11/2/2021 Submission of project information: this is the information that you will obtain and use to estimate free cash flows and cost of capital. The TA will assist you in your information collection phase in order to help you obtain all the information you need. You can still collect information after this date but the TA will not review it and provide you with comments. If you don't submit information to the TA by this date, you will be deducted 1 point. The information that you will submit don't have to be complete, but you must provide the sources. 4/3/2021 Submission of deliverables: please refer to the "Deliverables" section below for more information. - If you submit the project between 11/2/2021 and 24/2/2021, you will get bonus. Deliverables 1) Excel model: you will need to perform the following using Excel: - Estimate free cash flows for five years in the future - Calculate the cost of capital - Evaluate the project using two capital budgeting techniques one of which must be the NPV - Break-even analysis - Sensitivity analysis Scenario analysis using your assumptions. 2) Report: The report should consist of four sections, namely introduction, analysis, recommendation, and sources. The introduction should provide the reader with an overview of your business. In the analysis section, you should explain the steps you've taken to estimate free cash flows and cost of capital in detail. The conclusion should lay out your recommendation which will be based on your findings in The recommendation should start with an analysis of your findings (NPV, break-even analysis, sensitivity analysis, etc) followed by a conclusion. You don't need to explain how you calculated your findings but rather what these findings mean. The sources section should list all the sources of the information you used to estimate free cash flows and cost of capital. There's ges of the sources Excel provide you with comments. If you don't submit information to the TA by this date, you will be deducted 1 point. The information that you will submit don't have to be complete, but you must provide the sources. 4/3/2021 Submission of deliverables: please refer to the "Deliverables section below for more information. If you submit the project between 11/2/2021 and 24/2/2021, you will get bonus. Deliverables 1) Excel model: you will need to perform the following using Excel: Estimate free cash flows for five years in the future Calculate the cost of capital Evaluate the project using two capital budgeting techniques one of which must be the NPV - Break-even analysis - Sensitivity analysis Scenario analysis using your assumptions. 2) Report: The report should consist of four sections, namely introduction, analysis, recommendation, and sources. The introduction should provide the reader with an overview of your business. In the analysis section, you should explain the steps you've taken to estimate free cash flows and cost of capital in detail. The conclusion should lay out your recommendation which will be based on your findings in Excel. The recommendation should start with an analysis of your findings (NPV, break-even analysis, analysis, etc) followed by a conclusion. You don't need to explain how you calculated your findings but rather what these findings mean. The sources section should list all the sources of the information you used to estimate free cash flows and cost of capital. There's no limit on the number of pages of the sources section, but the introduction, analysis, and recommendation sections must not exceed two pages. Note The work should be conducted by all the members of the team (the team only). Plagiarism, and buying ready-made or custom written reports from outside will NOT be tolerated and constitutes ground for receiving an F in all your courses. Please carefully note all sources and assistance when you turn in your work. Under no circumstances should you take credit for work that is not yours. You should neither receive nor give any unauthorized assistance on any deliverable. If you have any questions about what constitutes "unauthorized assistance" please email me before the deliverable is submitted, Grade The project will be worth 10 points of your total grade. Your grade in this project will depend on the completeness of your deliverables, their correctness, and the quality of your work. YouTube links: 1. Break-even Analysis a. https://www.youtube.com/watch?v=1N6p3OxJxrQ b. https://www.youtube.com/watch?v=BjXd3jAcDo Fall 2020 Project Due Date: 4/3/2021 What is the project? Evaluate the financial feasibility of a new business venture of your choosing using the tools and concepts covered in this course. To evaluate the business, you will need to obtain information regarding revenues, costs, and cost of capital that you will use to estimate cash flows and cost of capital. You will most likely not find all the information you need on the internet and therefore you will have to conduct an offline research to obtain the relevant information. You can also obtain information from an an existing business that you have access to. How many students in each group? You can either work alone or in a group of 3-4 students. Males and females must not mix in a group Project Timeline 20/12/2020 Team formation: if there are students who are not already in a team after this date, they will be randomly grouped 28/12/2020 Submission of project idea: your idea must be submitted to and approved by the TA. If your idea is submitted after this date, you will be deducted 1 point. - 11/2/2021 Submission of project information: this is the information that you will obtain and use to estimate free cash flows and cost of capital. The TA will assist you in your information collection phase in order to help you obtain all the information you need. You can still collect information after this date but the TA will not review it and provide you with comments. If you don't submit information to the TA by this date, you will be deducted 1 point. The information that you will submit don't have to be complete, but you must provide the sources. 4/3/2021 Submission of deliverables: please refer to the "Deliverables" section below for more information. - If you submit the project between 11/2/2021 and 24/2/2021, you will get bonus. Deliverables 1) Excel model: you will need to perform the following using Excel: - Estimate free cash flows for five years in the future - Calculate the cost of capital - Evaluate the project using two capital budgeting techniques one of which must be the NPV - Break-even analysis - Sensitivity analysis Scenario analysis using your assumptions. 2) Report: The report should consist of four sections, namely introduction, analysis, recommendation, and sources. The introduction should provide the reader with an overview of your business. In the analysis section, you should explain the steps you've taken to estimate free cash flows and cost of capital in detail. The conclusion should lay out your recommendation which will be based on your findings in The recommendation should start with an analysis of your findings (NPV, break-even analysis, sensitivity analysis, etc) followed by a conclusion. You don't need to explain how you calculated your findings but rather what these findings mean. The sources section should list all the sources of the information you used to estimate free cash flows and cost of capital. There's ges of the sources Excel provide you with comments. If you don't submit information to the TA by this date, you will be deducted 1 point. The information that you will submit don't have to be complete, but you must provide the sources. 4/3/2021 Submission of deliverables: please refer to the "Deliverables section below for more information. If you submit the project between 11/2/2021 and 24/2/2021, you will get bonus. Deliverables 1) Excel model: you will need to perform the following using Excel: Estimate free cash flows for five years in the future Calculate the cost of capital Evaluate the project using two capital budgeting techniques one of which must be the NPV - Break-even analysis - Sensitivity analysis Scenario analysis using your assumptions. 2) Report: The report should consist of four sections, namely introduction, analysis, recommendation, and sources. The introduction should provide the reader with an overview of your business. In the analysis section, you should explain the steps you've taken to estimate free cash flows and cost of capital in detail. The conclusion should lay out your recommendation which will be based on your findings in Excel. The recommendation should start with an analysis of your findings (NPV, break-even analysis, analysis, etc) followed by a conclusion. You don't need to explain how you calculated your findings but rather what these findings mean. The sources section should list all the sources of the information you used to estimate free cash flows and cost of capital. There's no limit on the number of pages of the sources section, but the introduction, analysis, and recommendation sections must not exceed two pages. Note The work should be conducted by all the members of the team (the team only). Plagiarism, and buying ready-made or custom written reports from outside will NOT be tolerated and constitutes ground for receiving an F in all your courses. Please carefully note all sources and assistance when you turn in your work. Under no circumstances should you take credit for work that is not yours. You should neither receive nor give any unauthorized assistance on any deliverable. If you have any questions about what constitutes "unauthorized assistance" please email me before the deliverable is submitted, Grade The project will be worth 10 points of your total grade. Your grade in this project will depend on the completeness of your deliverables, their correctness, and the quality of your work. YouTube links: 1. Break-even Analysis a. https://www.youtube.com/watch?v=1N6p3OxJxrQ b. https://www.youtube.com/watch?v=BjXd3jAcDo