New Heritage Doll Company

Executive Summary:

(Explain what the situation is and what is at stake)

Assumptions:

Please list assumptions you make for each case and explain the rationale behind your assumptions.

Quantitative Analysis:

Please use a table to show NPV, IRR and Payback of each projects.

Ask some what if questions (Sensitivity Analysis):

When we make financial decisions, we always face many uncertainties.You want to evaluate such uncertainties as much as you can.

Risk factors and other considerations:

For Example: What might go wrong? What are thelong term impacts of each project on the overall business, growth potentials? What are the risks? Are the forecasts too optimistic?

Conclusion:

What should Harris recommend?

2 Exhibit 2 3 4 5 6 Revenue Selected Operating Projections for Design Your Own Doll 2012 6,000 Revenue Growth 7 Production Costs 8 Fixed Production Expense (excl depreciation) 9 Variable Production Costs 10 Depreciation 11 Total Production Costs 12 Selling, General & Administrative 13 Total Operating Expenses 14 15 Operating Profit 16 17 Working Capital Assumptions: 18 Minimum Cash Balance as % of Sales 19 Days Sales Outstanding 20 Inventory Turnover (prod. cost/ending inv.) 21 Days Payable Outstanding (based on tot. op. exp.) 22 23 Capital Expenditures 24 25 2010 1,201 1,201 (1,201) 4,610 2011 0 0 0 0 0 0 0 0 0 1,650 2,250 310 4,210 1,240 5,450 550 3.0% 59.2x 12.2x 33.7x 310 2013 14,360 139.3% 1,683 7,651 310 9,644 2,922 12,566 1,794 3.0% 59.2x 12.3x 33.8x 310 2014 20,222 40.8% 1,717 11,427 310 13,454 4,044 17,498 2,724 3.0% 59.2x 12.6x 33.9x 2,192 2015 21,435 6.0% 1,751 12,182 436 14,369 4,287 18,656 2,779 3.0% 59.2x 12.7x 33.9x 826 2016 22,721 6.0% 1,786 12,983 462 15,231 4,544 19,775 2,946 3.0% 59.2x 12.7x 33.9x 875 2017 24,084 6.0% 1,822 13,833 490 16,145 4,817 20,962 3,123 3.0% 59.2x 12.7x 33.9x 928 2018 25,529 6.0% 1,858 14,736 520 17,113 5,106 22,219 3,310 3.0% 59.2x 12.7x 33.9x 983 2019 27,061 6.0% 1,895 15,694 551 18,140 5,412 23,553 3,509 3.0% 59.2x 12.7x 33.9x 1,043 2020 28,685 6.0% 1,933 16,712 584 19,229 5,737 24,966 3,719 3.0% 59.2x 12.7x 33.9x 1,105