Identify and calculate the key metrics that will be used to analyze the decision. This might include proforma financials, NPV, IRR, Payback, ROIC, break-even, and/or other measures

INTRODUCTION It is early 2014. A leading global skincare manufacturer, Health & Beauty Co. (HBC), has been losing market share in the hand and body lotion market. While the firm still leads its competitors in market share in this segment of personal care, it seeks to stem further share erosion and, to that end, has recently developed a strategy to recover market share through rebranding, advertising, and repackaging. The situation is especially critical since a large competitor is believed to be launching a new skincare product in the near future. Your task as senior financial analyst is to draft the capital expenditure proposal related to the new packaging proposal. Information to support you in this task follows. You should complete the firm's capital expenditure template included in Appendix 1. BACKGROUND: The U.S. skincare market has been growing at an average rate of 4% over the past three years and is estimated to reach $11 billion in 2018. This market includes facial, body, and hair care, as well as other makeup segments. HBC holds a leadership position in the hand and body lotion market but needs to evolve to meet consumers' growing needs and compete with an ever-increasing number of competitors. Recent market research by HBC revealed that consumers perceive the current packaging as outdated: old, generic. dull, and cheap looking. It also lacks a contemporary and premium look compared with some of the main competitor's products, HBC is in the process of rebranding these product lines, and newly developed packaging will play a pivotal role in the plan to rebrand and reposition the product. The new packaging aims to convey the brand image of modern, up-to- date, high-quality, everyday use, and good value. Preliminary investigation comparing the existing and proposed packaging revealed the following: 1. The proposed packaging will keep the brand fresh and relevant while maintaining the brand heritage and appeal to existing and future consumers. 2. The project: a. Provides the opportunity to simplify an over- complicated and confusing pack line-up by reducing the current portfolio of sizes. b. May lead to improved margins since there is the potential to raise prices on the newly packaged items. The current gross margin of the product is 69%. 3. Overall, the new pack design is a cost-effective pack with package unit prices lower than that of the current brand pack. 4. The brand team believes that incremental sales growth is achievable through the combination of new brand positioning, advertising, and packaging. Feedback from several large retailers consulted on the new packaging was consistently positive.