Miami International University Nordstrom Inc Investment Proposal Milestone 3

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My Chosen Company is Nordstrom Inc.

8-10 Page Paper MLA Format

Prompt:

Imagine you are a manager working at a publicly traded company (You will select a company from the list below)You have been tasked with preparing an investment proposal for a large bank loan to finance a major expansion into another country. Your funding request will include both narrative text and financial models designed to clearly explain and justify the investment proposal, how it will be financed, and its likely impact on the company. As support, you will show the proposal’s most likely financial implications and the consolidated financial projection with and without the project.

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MBA 640 Final Project Milestone Three Guidelines and Rubric Overview: The final project for this course is the creation of an external capital funding proposal. Most businesses face a landscape of uncertainty and a never-ending stream of risks and opportunities. Managers must continually project the likely financial impact of decisions, make recommendations, act on those decisions, determine how to pay for them, and evaluate the costs and effectiveness of what has been done. Many decisions are short-term, routine, and operational. Others are longer-term investment decisions that require substantial new resources, such as developing new services, expanding into new geographic markets, or undertaking business combinations or spin-offs. Each requires managers to forecast, plan, and make decisions based on a thorough understanding of both internal and external factors that can affect a company’s financial success. For the summative assessment in this course, you will bring your finance and economics knowledge to bear by preparing an external capital funding proposal for a major international investment at a publicly traded corporation. In order to secure the support of potential financial backers, your proposal will need to lay out what the proposed investment opportunity is, how it fits within the company’s broader mission and goals, its financial impact, and the amount being requested and why (including alternative funding mechanisms considered). In addition, it will also need to include information on the organization’s context, risk factors, and microeconomic assumptions that could affect the success of the investment. Prompt: Submit a short paper that addresses Section III, Part C; Section V; and Section VI of the final project. Specifically, the following critical elements must be addressed: III. Justification: C. Financial impact. This section should discuss the project’s most likely financial implications and the consolidated financial projection with and without the project. Be sure to: 1. Project the incremental, annual, and cumulative cash benefits and outflows associated with the proposed expansion for the next seven to 10 years, using a spreadsheet or other relevant presentation vehicle to support your narrative. Be sure to justify your assumptions and methodology based on sound microeconomic and financial principles. For example, what assumptions have you made about demand, price, volume, capital purchase costs, incremental hiring, and so on? 2. Develop a consolidated financial projection of revenue, pretax income, and cash flow for the overall business, over that same number of years, both with and without the proposed investment. Use a spreadsheet or other relevant presentation vehicle to support your narrative, being sure to describe any relevant assumptions. V. Financing: In this section, compare the proposed loan to alternative financing methods. Specifically: A. Weigh the pros and cons of raising money using internal financing mechanisms versus seeking funding through global capital markets via loans, commercial paper, bonds, or equity financing. Which might be viable alternatives should the loan not be approved? Support your answer with appropriate research and evidence. B. Assess the viability of a business combination as a mechanism for expanding into the new market. Is this a reasonable option for the company? Why or why not? Support your answer with appropriate research and evidence. VI. Track Record: Use this section to persuade the lender that you are credit-worthy. You must: A. Convincingly argue that your organization is on solid financial footing, and thus at a low risk for default, supporting your argument with appropriate financial statements, ratios, and other indicators of financial performance and health. B. Convincingly argue for your organization’s trustworthiness, providing credible evidence of legal and ethical financial behavior. For example, this might include recent audit results; credit history; absence of significant lawsuits, recalls, or regulatory judgments; or other evidence designed to show that the company holds itself to the highest legal and ethical standards. Rubric Guidelines for Submission: Your investment project and justification paper should be approximately 8–10 pages in length (excluding spreadsheets, other exhibits, and list of references as necessary). It should be double-spaced with 12-point Times New Roman font and one-inch margins, and should use APA format for references and citations. Critical Elements Justification: Financial Impact: Expansion Proficient (100%) Projects expansion’s incremental, annual, and cumulative cash benefits and outflows over specified time period, using relevant presentation vehicle to support narrative and justifying assumptions and methodology based on sound microeconomic and financial principles Justification: Financial Impact: Consolidated Develops consolidated financial projection for overall business with and without the proposed investment over specified time period, using relevant presentation vehicle to support narrative and describing relevant assumptions Financing: Global Capital Markets Weighs pros and cons of raising money using internal financing versus global capital market mechanisms, identifying viable alternatives based on appropriate research and evidence Needs Improvement (75%) Projects cash benefits and outflows over specified time period, using relevant presentation vehicle and justifying assumptions and methodology, but response contains inaccuracies, omits key details, or is poorly grounded in microeconomic and financial principles Develops consolidated financial projection for overall business with and without the proposed investment over specified time period, using relevant presentation vehicle and describing assumptions, but response contains inaccuracies or omits key details Weighs pros and cons of internal financing versus global capital market mechanisms, identifying viable alternatives based on research and evidence, but response contains inaccuracies, omits key details, or research and evidence are not relevant or cursory Not Evident (0%) Does not project expansion’s incremental, annual, and cumulative cash benefits and outflows over specified time period Value 15 Does not develop consolidated financial projection for overall business with and without the proposed investment over specified time period 15 Does not weigh pros and cons of raising money using internal financing versus global capital market mechanisms 15 Financing: Business Combination Assesses the viability of a business combination as a mechanism for expanding into the new market, supported by appropriate research and evidence Track Record: Financial Performance Convincingly argues that organization is on solid financial footing, supported by appropriate financial statements, ratios, and other indicators of financial performance and health Track Record: Legal and Ethical Convincingly argues for organization’s trustworthiness, providing credible evidence of legal and ethical financial behavior Articulation of Response Submission has no major errors related to citations, grammar, spelling, syntax, or organization Assesses the viability of a business combination as a mechanism for expanding, supported by research and evidence, but response is cursory, contains inaccuracies, or research and evidence are not appropriate Argues that organization is on solid financial footing, supported by financial statements, ratios, and other indicators of financial performance and health, but argument is cursory, contains inaccuracies, or supporting evidence is not credible, appropriate, or convincing for lenders Argues for organization’s trustworthiness, providing evidence of legal and ethical financial behavior, but argument is cursory, contains inaccuracies, or evidence is not credible or convincing to lenders Submission has major errors related to citations, grammar, spelling, syntax, or organization that negatively impact readability and articulation of main ideas Does not assess viability of a business combination as a mechanism for expanding into the new market 15 Does not argue that organization is on solid financial footing 15 Does not argue for organization’s trustworthiness, providing evidence of legal and ethical financial behavior 15 Submission has critical errors related to citations, grammar, spelling, syntax, or organization that prevent understanding of ideas Total 10 100%
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Running head: NORDSTROM EXTERNAL FUNDING PROPOSAL

Nordstrom External Funding Proposal
Name
Institutional Affiliation
Date

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NORDSTROM EXTERNAL FUNDING PROPOSAL

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Introduction
According to Bosharaand Emmons, (2015), the term financial success means different things
to different organizations, with some of them believing that it is free from debt and having
financial freedom while to others, it has a global market reach. In attaining commercial success,
businesses face a lot of risks which is where managers come in. In organizations, managers play
the role of overseeing departments and projects concerning investments using leadership skills
(Webb, 2017). This article aims at laying out an investment opportunity proposal for Nordstrom
Inc. The report states the justification for the plan, the financial impact that the project will have
on the company, the financing methods, and track records for the project.
About Nordstrom Inc.
According to Brown (2019), Nordstrom is a company that started in the year 1901, and that
has existed for over a hundred years. Nordstrom started as a shoe company in Pike in Seattle
where it grew and led to its opening of other stores. In the 1960s, the company sought further
expansion which led it to venture in women’s clothing and had the purchase of Seattle’s best
apparel in 1963. The company, therefore, continued engaging in selling shoes and garments. The
company was first referred to as Wallin& Nordstrom but was renamed to Nordstrom in 1971.
Nordstrom is a company that has been passed down from father to son since Nordstrom but
initially started with another family, the family of Wallin, who did not pass down shares to his
sons. In 1973, as Brown (2019) explains, the company was recognized as the most significant
volume fashion specialty store in the West Coast. In the past decade, Nordstrom has managed to
implement industry-leading order fulfillment and inventory management capabilities to provide a
great shopping experience in stores and online (Brown, 2019).

NORDSTROM EXTERNAL FUNDING PROPOSAL

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Being one of the most successful companies in North American over the past decade, Nordstrom
has been able to bring forth some of the best products and with exceptional services. The
company has also managed to bring some of the most exceptional merchandise where customers
can maximize their delivery capabilities(Spector, 2017). Nordstrom, according to Brown (2019),
expanded into a national company with the launch of the Nordstrom Rack off-price sales
division. The company has developed its target market through the provision of customer choice
based on prices and availability. From the company’s anticipation of global economic conditions,
Nordstrom seeks expansion opportunities for it to become a global business(Spector, 2017).
Expanding to Peru will give Nordstrom the boost that they long for.
Description of investment
This proposed investment is intended for the global expansion of Nordstrom rack stores in the
Latin American Market. This project is set to start with the initial store location in Lima, Peru,
which targets new customers that shop at the Jockey Plaza Shopping Center or in that
vicinity.According toCrisóstomoBalvin, Ortiz Rueda, andQuispeTrevejo,(2018), the Jockey
Plaza Shopping Center was opened in the year 1997 and had over two hundred boutiques and
shops near Lima University in Santiago de Surco district. In 2016, the Plaza came up with new
retail space that accommodates the entry of multinational brands like Forever 21 into the market.
Jockey Plaza Shopping Center is strategically located between a home center, a supermarket, and
tw...


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