Use capital budgeting tools to determine the quality of three proposed investment projects, and prepare a 6-8 page report that analyzes your computations and recommends the project that will bring the most value to the company.IntroductionThis assessment is about one of the basic functions of the finance manager, which is allocating capital to areas that will increase shareholder value and add the most value to the company. This means forecasting the projected cash flows of the projects and employing capital budgeting metrics to determine which project, given the forecast cash flows, gives the firm the best chance to maximize shareholder value. As a finance professional, you are expected to:Use capital budgeting tools to compute future project cash flows and compare them to upfront costs.Evaluate capital projects and make appropriate decision recommendations.Prepare reports and present the evaluation in a way that finance and non-finance stakeholders can understand.ScenarioSenior leadership has now called upon you to analyze three capital project requests based on forecasted cash flow as they relate to maximizing shareholder value.Your RoleYou are one of Maria's high-performing financial analyst managers at ABC Healthcare Corporation and she trusts your work and leadership. Senior leadership was impressed with your presentation in Assessment 1 and they are tasking you with the analysis of these three proposed capital projects based on forecasted cash flow. You have completed forecasting the projected cash flows of the projects as reflected in the attached spreadsheets, Projected Cash Flows [XLSX]. You now need to conduct your analysis recommending which will provide the most shareholder value to the organization.RequirementsUse capital budgeting tools to compute future project cash flows and compare them to upfront costs. Remember to only evaluate the incremental changes to cash flows.Employing capital budgeting metrics, determine which project, given the forecast cash flows, gives the organization the best chance to maximize shareholder value.Demonstrate knowledge of a variety of capital budgeting tools including net present value (NPV), internal rate of return (IRR), payback period, and profitability index (PI). The analysis of the capital projects will need to be correctly computed and the resulting decisions rational.Evaluate capital projects and make appropriate decision recommendations. Accurately compare the indicated projects with correct computations of capital budgeting tools and then make rational decisions based on the findings.Select the best capital project, based on data analysis and evaluation, that will add the most value for the company. Provide a rationale for your recommendations based on your financial analysis.Prepare reports and present the evaluation in a way that finance and non-finance stakeholders can understand.Project A: Major Equipment PurchaseA new major equipment purchase, which will cost $10 million; however, it is projected to reduce cost of sales by 5% per year for 8 years.The equipment is projected to be sold for salvage value estimated to be $500,000 at the end of year 8.Being a relatively safe investment, the required rate of return of the project is 8%.The equipment will be depreciated at a MACRS 7-year schedule.Annual sales for year 1 are projected at $20 million and should stay the same per year for 8 years.Before this project, cost of sales has been 60%.The marginal corporate tax rate is presumed to be 25%. Project B: Expansion Into Three Additional StatesExpansion into three additional states has a forecast to increase sales/revenues and cost of sales by 10% per year for 5 years.Annual sales for the previous year were $20 million.Start-up costs are projected to be $7 million and an upfront needed investment in net working capital of $1 million. The working capital amount will be recouped at the end of year 5.The marginal corporate tax rate is presumed to be 25%.Being a risky investment, the required rate of return of the project is 12%.Project C: Marketing/Advertising CampaignA major new marketing/advertising campaign, which will cost $2 million per year and last 6 years.It is forecast that the campaign will increase sales/revenues and costs of sales by 15% per year.Annual sales for the previous year were $20 million.The marginal corporate tax rate is presumed to be 25%. Being a moderate risk investment, the required rate of return of the project is 10%.Deliverable FormatIn this assessment, you will prepare an appropriate evaluation report to senior leadership using sound research and data to defend your decision.Report requirements:Your report should follow the corresponding MBA Academic and Professional Document Guidelines, including single-spaced paragraphs.Ensure written communication is free of errors that detract from the overall message and quality.Format your paper according to APA style and formatting.Use at least three scholarly resources. Length: Between 6–8 pages of content beyond the title page, references, and any appendices.Use 12 point, Times New Roman.

MINICASE: Digital Age Games Digital Age Games is a video game publisher that took gaming to a new level in the early 1990s with its well-known “Sack Attack—Extreme Football” game. Unfortunately, it has not had a popular game title since that time and is attempting to make a comeback with its new game “Drop-Kick—Extreme Wrestling.” However, Digital Age has found that there is “extreme” competition for space on retailer shelves, as the top three game publishers (Digital Age is not one of them) have a 90 percent share of the market and a corresponding share of shelf space. Therefore, Digital Age’s sales group is an area of key concern. To address this concern, Digital Age’s management has hired Shirley Hill, job analysis consultant, to conduct a job analysis of the company’s sales positions and give overall advice on how to improve the recruitment process for those positions. Shirley began her analysis by doing research on the gaming industry as a whole, reviewing the sales structure and job descriptions of Digital Age’s major competitors and determining goals and objectives of Digital Age’s management. Management told her that it wants to focus on customer prospecting and product demonstration by increasing in-person salesperson attention (and therefore, salesperson travel). It also wants employees with gaming knowledge who will better understand product detail and be able to communicate it to customers. She spoke at length with the sales managers to determine what the salespeople actually do, as well as which are high performers and which are low performers. On her office visits with management, she perceived the tension her presence brought to the sales representatives, who were concerned that their jobs may be at stake, so she spared them and herself by not talking with them directly. Because the job descriptions had not been updated since 1997, her next order of business was to create a new description for the sales representative position. Her draft job description is as follows: Sales Representative The Digital Age Games North American sales organization drives the placement, retail marketing, and retail advertising support for consumer goods in its established retail and distribution channels. The sales representative must: ·  Manage U.S. video game distributors and other regional accounts for both video game and PC game products. ·  Achieve quarterly sell-in objectives and revenue targets. ·  Maintain established accounts through regular customer contact in pursuit of follow-on sales. ·  Provide crisp and consistent feedback/communication to managers and others as required. Selection criteria: ·  2–3 years of experience in sales of entertainment products. ·  Bachelor’s degree. ·   Team player who can deal with ambiguity. ·  Customer service–oriented. ·  Strong presentation and communication skills. ·  Excellent organizational skills and attention to detail. Finally, Shirley made recommendations as to sources for new sales recruits. Because knowledge of gaming and the product is central to the position, she recommended that the company primarily look to applicants who are existing employees in the company. Similarly, Shirley reasoned, by advertising positions on the Internet, both on Digital Age’s website and other third-party job sites, Digital Age would attract tech-savvy applicants. Shirley insisted that these two sources would provide more than enough quality applicants. Shirley was quite satisfied with her analysis and recommendations, but management has some concerns and has scheduled a feedback meeting with her (Johnston & Marshall, 2013).  Questions: 1.  From the facts given, did Shirley do a proper job analysis? What else could she have done to evaluate the current positions? Explain. 2.  Evaluate the job description. Is there anything you would have added, deleted, or changed? 3.  Besides those recommended by Shirley, what other source(s) of applicants might Digital Age use for recruiting new salespeople? Why?