Course Student details Date

Surname:
Global Finance
Name:

Activity 1. Case Study: New Heritage Doll Company.

Investment budget

Objectives

The New Heritage Doll Company case study will put into practice some of the essential
concepts studied in the Finance in a Digital Environment course. In particular,
investment evaluation tools will be used, especially when choosing one of two
competitive and mutually exclusive projects that resolve the expansion requirements
of a company's core business.

Description of the activity and guidelines for development.

This case study examines an American company founded in 1985 and dedicated to
manufacturing and selling dolls, which needs to expand its main business lines
dedicated to its traditional toy market. Its budget restrictions are significant, so it has
to choose one of the following two projects to address the new challenges in the US
toy market.

▶ Expand the Match My Doll Clothing Line, which aims to lessen demand seasonality
for some of its products.
▶ Create the Design Your Own Doll Line, which allows the customer to design and
personalize the doll they intend to purchase.

This is a group case study that should prepare a document that answers the following
questions. Remember that you must use the material provided on the course, and use
this knowledge to resolve the case.

Activities 1
 Course Student details Date
Surname:
Global Finance
Name:

Questions:

These questions are intended to help students focus on the key elements as they read
the case.

1. What is the group's strategy and what are its main financial variables?
2. What are the cash flows for each project? The forecast criteria and the time
horizon must be justified.
3. What is the discount rate or weighted average cost of capital?
4. What are the NPV, IRR and payback for each project?
5. Which of the two projects would you recommend?
6. Which of the two projects carries a greater risk?

Submission criteria

This is a group activity, so the group representative should include the control sheet,
attach an Excel spreadsheet with their supporting calculations, and an summary
presentation with the case study resolution on behalf of the team (we recommend
preparing it in Powerpoint and exporting it to pdf). Each team member must also
submit the Powerpoint containing the case study resolution and the Excel spreadsheet
with the supporting calculations.

Include your team number and its members.

Evaluation criteria

The evaluation criteria will be as follows.

▶ Describe diagrammatically the company's strategy.

▶ Calculate the cash flow forecast for both projects.
▶ Calculate and justify the discount rate.

Activities 2
 Course Student details Date
Surname:
Global Finance
Name:

▶ Calculate the NPV, the IRR and the pay back for each project.
▶ Justify the project selected, including its associated risks.

Bibliographic References

The report should include a bibliography in APA format, which means details of all the
bibliographic references in the report. Plagiarism is not permitted. Therefore, any
reference should be correct. If plagiarism is detected in more than one question, it will
be notified as a serious breach to course management.

Academic criteria for references should be followed.

▶ All the references in the text that respond to the questions should appear in the
bibliography.
▶ All the references in the bibliography should be referenced in your text.

An additional bibliography should not be added that suggests interesting related

references as additional reading.

The bibliographic references should focus on references used to respond to the case
study questions.

Maximum length of the activity: the report should have a single Excel file for the
calculations.

The approach to the case is available in the virtual classroom

Activities 3