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The Genesis Energy operations management team, nearing completion of its agreement with Sensible Essential Consulting, 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 Microsoft Word report with Executive Summary should include all of your calculations as appendices (5 pages, or 1 page for each project). Name your file LastnameFirstInitial_M5_A2.doc.

In addition to the summaries for each project, please provide a copy of the Excel Capital Budget showing the calculations for each of the projects. Name this file LastnameFirstInitial M5_A2 Capital Budget.xlxs

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 2.

This assignment is based on those findings. In this assignment, you will update the PowerPoint presentation you started in M4: Assignment 2. Be sure to adhere to the following information:

• The presentation should be approximately 6–8 minutes (or 10–12 slides). Use what you started in M4: Assignment 2 and then adapt slides to showcase your project selections from the first part of this assignment.
• An executive summary of your findings from M4: Assignment 2.
• A statement of the problem or topic is included.
• A concise analysis of the findings is included.

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 the due date assigned, deliver your MS Word report, your Capital Budgeting MS Excel spreadsheet, and your MS PowerPoint presentation to the Submissions Area.