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Assignment
2: Required Assignment 2—Genesis Energy Capital Plan Report

The Genesis Energy operations
management team, nearing completion of its agreement with Sensible Essentials,
was asked by senior management to present a capital plan for the operating expansion.
The capital plan was not to be a wish list but an analysis of the necessary
expenditures to successfully establish a fully equipped operating facility
overseas.

In addition, senior management
requested meaningful financial and operating metrics to ensure that the
performance objectives for the facility were being met. The operations
management team was given five days to accomplish the following:

1.
Calculate the firm’s WACC.

2.
Prepare and analyze each planned capital expenditure.

3.
Evaluate, rank, and recommend the capital expenditures according
to beneficial value to the organization, using the evaluation tools NPV,
payback, and IRR. Evaluation, ranking, and recommendations should be by
category of expenditures. For example, facility, equipment 1, 2, and 3, and
inspection.

4.
Using the selected choices in part three, calculate the full cost
of establishing a fully equipped facility. This would include the facility,
equipment 1, 2, and 3, and inspection. In addition, calculate the payback, NPV,
and IRR for the completed facility.

5.
Construct and recommend between three and five metrics to measure
the performance of the organization. At least one metric should be dividend
decision-making driven.

6.
Prepare an executive summary along with a separate document showing
the calculations.

Part I

Following the example of the
operations management team, do the following:

1.
Download the
Capital Budgeting spreadsheet, and compute the WACC for Genesis Energy.

2.
Using the information provided in the spreadsheet, analyze Genesis
Energy’s project options. Then, calculate the periodic and cumulative net cash
flows for each potential project and its associated options. Please note that
there are five projects (facility, equipment pieces 1, 2, and 3, and internal
inspection), and that each project offers multiple-configuration options
(facility size, equipment type, etc.).

3.
Evaluate, rank, and recommend a specific option for each capital
project according to beneficial value to the organization, using the evaluation
tools NPV, payback, and IRR.

4.
Construct and recommend between three and five metrics to measure
the performance of the new operating strategy. At least one metric should
reflect dividend policy as it relates to rewarding shareholders.

5.
Prepare an executive summary describing your recommendations for
each project and the overall cost, net cash flows, and expected returns of the
operating configuration that you recommend. Be sure to justify your
recommendations in terms of the investment criteria applied in Step 3 above. Be
sure to report the full cost of the facility as it is configured per your
recommendations. Present and justify your operating strategy performance
metrics.

Your complete report should
include all of your calculations as appendices (5 pages, or 1 page for each
project).

Part
II—Executive Summary Presentation

Because of limited resources in
an era of plentiful opportunities, companies must carefully select investments.
You analyzed Genesis Energy’s expansion plans and explained your findings
in M4: Assignment 1.

This assignment is based on those
findings. In this assignment, you will create a PowerPoint presentation that
will include the following information:

·
An executive summary of your findings from M4: Assignment 1. Be
sure to adhere to the following:

o
The presentation should be approximately 6–8 minutes (or 10–12
slides).

o
A statement of the problem or topic is included.

o
A concise analysis of the findings is included.

o
Specific details from M4:
Assignment 1 to highlight or support the summary are
incorporated.

Develop a 10–12-slide
presentation in PowerPoint format. Apply APA standards to citation of sources.
Use the following file naming convention: LastnameFirstInitial_M5_A2.ppt.

By Wednesday, April 26, 2017,
deliver your assignment to the M5:
Assignment 2 Dropbox.

Assignment 2 Grading Criteria	Maximum Points
Computed the WACC for Genesis Energy.	32
Calculated the periodic and cumulative net cash flows for each of the five potential projects and their associated options.	32
Evaluated, ranked, and recommended a specific option for each capital project according to beneficial value to the organization using evaluation tools NPV, payback, and IRR.	72
Constructed and recommended 3–5 metrics to measure the performance of the organization (At least one metric should be dividend decision-making driven.).	60
Prepared an executive summary describing your project recommendations and the full cost of the new facility.	76
Wrote in a clear, concise, and organized manner; demonstrated ethical scholarship in accurate representation and attribution of sources; displayed accurate spelling, grammar, and punctuation.	28
Total:	300