New Heritage Doll Company Capital Budgeting - 3236 Words

New Heritage Doll Company: Capital Budgeting In mid-September of 2010/ Emily Harris, vice president of New Heritage Doll Companys production division, was weighing project proposals for the companys upcoming capital budgeting meetings in October. Two proposals stood out based on their potential to strengthen the divisions innovative product lines and drive future growth. However, due to constraints on financial and managerial resources, Harris knew it was possible that the firms capital budgeting committee would decline to approve both projects. She also knew that New Heritages licensing and retail divisions would promote compelling projects of their own. Consequently, Harris had to be prepared to recommend one of her projects over†¦show more content†¦New Heritages capital budget was set by the board of directors in consultation with top officers, who in turn sought input from each of the divisions. The capital and operating budgets were linked; historically, the capital budget comprised approximately 15% of the compa nys EBITDA. The committee had limited discretion to expand or contract the budget, according to its view of the quality of the investment opportunities, competitive dynamics, and general industry conditions. Ð . К. Ð’ Before being considered by the committee, projects were described, analyzed, and summarized in self-contained proposal documents prepared by each division. These contained business descriptions, at least five years of operating and cash flow forecasts, spending requirements by asset category, personnel requirements, calculations of standard investment metrics, and identification of key project risks and milestones. -5 Financial Analyses Financial analysis began with operating forecasts developed with oversight from New Heritage operating managers. Revenue projections were derived from forecasts of future prices and volumes. Fixed and variable costs were estimated separately, by expense category. Forecasts of working capital requirements were likewise vetted by line managers, who paid particular attention to a projects requirements for various types of inventory. Forecasts for fixed assets and related depreciationShow MoreRelatedNew Heritage Doll Company : Capital Budgeting1321 Words   |  6 PagesNew Heritage Doll Company: Capital Budgeting The New Heritage Doll Company offered a unique line of dolls as an alternative to its competitors, and it wanted to extend its brand for future growth. The company has three operating divisions: production, retailing and licensing. All three divisions planned to promote projects of their own to compete for the same limited resources. Emily Harris, vice president of the production division, had to be prepared to select one of the two project proposalsRead MoreNew Heritage Doll Company: Capital Budgeting3226 Words   |  13 PagesNew Heritage Doll Company: Capital Budgeting In mid-September of 2010/ Emily Harris, vice president of New Heritage Doll Companys production division, was weighing project proposals for the companys upcoming capital budgeting meetings in October. Two proposals stood out based on their potential to strengthen the divisions innovative product lines and drive future growth. However, due to constraints on financial and managerial resources, Harris knew it was possible that the firms capital budgetingRead MoreThe New Heritage Doll Company : Capital Budgeting902 Words   |  4 PagesThe New Heritage Doll Company: Capital Budgeting Summary The New Heritage Doll Company was founded in 1985 by Ingrid Beckwith, a retired psychologist, who specialized in child development. She was also a grandmother of two young girls. Beckwith created her downline to target young girls ages 3 to 12 years old. She even had a baby doll line targeting even younger girls and â€Å"celebrity† line for teens. Her goal was to develop girl s imagination and foster positive self-image. To do this she createdRead MoreNew Heritage Doll Company Write Up1317 Words   |  6 PagesChmykhalo-Friermood Professor N. Cohen FINA 6273-Section 10 October 23, 2014 New Heritage Doll Company Write-up Introduction New Heritage Doll Company is a firm that has ventured into doll production which has sought to extend its brand in order to broaden its market framework and more importantly capitalize on high levels of customer loyalty. The vice president of the Company, Emily Harris, is to forward her project proposal to the Budgeting Committee for evaluation. The Vice-president’s objective for proposingRead MoreNew Heritage Company Essay3998 Words   |  16 PagesNEW HERITAGE DOLL COMPANY Capital Budgeting NEW HERITAGE DOLL COMPANY Capital Budgeting Brief Case Brief Case Brief Case Brief Case Brief Case Brief Case Brief Case Brief Case To: CFO (New Heritage Doll Company) From: Date: 11/16/12 RE: NEW HERITAGE DOLL COMPANY To: CFO (New Heritage Doll Company) From: Date: 11/16/12 RE: NEW HERITAGE DOLL COMPANY Here a composite report is advanced on the toy industry, New Heritage Doll Company and the evaluation ofRead MoreCapital Budgeting Is A Means By Which Companies Can Evaluate The Long Term Economic Impact On Investment Projects1490 Words   |  6 PagesCapital budgeting is a means by which companies can evaluate the long-term economic impact of proposed investment projects. It comprises both a financial and investment component. 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The New Heritage Doll CompanyRead MoreCapital Budgeting Hbr2246 Words   |  9 PagesN F OR EG R OU ND R E A D IN G Finance: Capital Budgeting Company  and  Industry  Overview   The  New  Heritage  Doll  Company,  based  in  Sacramento,  California,  was  a  privately  held  company   with   450   employees   and   approximately   $245   million   in   fiscal   2009   revenues.   This   represented   approximately  8%  of  the  $3.1  billion  U.S.  doll  industry,  which  was  projected  to  grow  by  2%  annually   to  $3.4  billion  in  retail  sales  by  2013.  Ã‚  In  turn,  the  doll  industry  represented  a  7.4%  share  of  the  total   Read MoreDolls and New Heritage Doll3976 Words   |  16 Pagespresident of New Heritage Doll Company’s production division, was weighing project proposals for the company’s upcoming capital budgeting meetings in October. Two proposals stood out based on their potential to strengthen the division’s innovative product lines and drive future growth. However, due to constraints on financial and managerial resources, Harris knew it was possible that the firm’s capital budgeting committee would decline to approve both projects. She also knew that New Heritage’sRead MoreSimulation Methods1214 Words   |  5 PagesCase Study admin | April 3, 2013 Case Study Acting as the CEO of New Heritage Doll company and need to decide which investment projects can create values for shareholders’ wealth so that the company can receive funding in the next five years. Student’s task is to evaluate proposed projects using the financial and qualitative information provided and to select projects to be approved for a given year’s investment plan using any evaluation criteria deem appropriate. Students are to submit the simulationRead MoreNew Heritage Doll1010 Words   |  5 PagesNew Heritage Doll Company Capital Budgeting Analysis The New Heritage Doll Company is a company that makes dolls for children between the ages 3 – 12 years. The company has revenues of 245 million USD and an operating profit of 24 million USD. The company has three major divisions – The Retailing division, the Licensing division and the Production division. The head of the production division has to choose between two capital intensive projects that have been presented to her - the â€Å"Make My Doll