MBA 640 Creation of an External Capital Funding Proposal
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MBA 640 Creation of an External Capital Funding Proposal
MBA 640, Creation, External, Capital, Funding, Proposal
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:
- 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:
- 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?
- 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.
- 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.
- 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.
- 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 Proficient (100%) Needs Improvement (75%) Not Evident (0%) Value
Justification: Financial Impact:
Expansion
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
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
Does not project expansion’s incremental, annual, and cumulative cash benefits and outflows over specified time period
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
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
Does not develop consolidated financial projection for overall business with and without the proposed investment over specified time period
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
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
Does not weigh pros and cons of raising money using internal financing versus global capital market mechanisms
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
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
Does not assess viability of a business combination as a mechanism for expanding into the new market
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
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
Does not argue that organization is on solid financial footing
Track Record: Legal and Ethical
Convincingly argues for organization’s trustworthiness, providing credible evidence of legal and ethical financial behavior
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
Does not argue for organization’s trustworthiness, providing evidence of legal and ethical financial behavior
Articulation of Response
Submission has no major errors related to citations, grammar, spelling, syntax, or organization
Submission has major errors related to citations, grammar, spelling, syntax, or organization that negatively impact readability and articulation of main ideas
Submission has critical errors related to citations, grammar, spelling, syntax, or organization that prevent understanding of ideas
RUBRIC
Excellent Quality 95-100%
Introduction 45-41 points
The background and significance of the problem and a clear statement of the research purpose is provided. The search history is mentioned.
Literature Support 91-84 points
The background and significance of the problem and a clear statement of the research purpose is provided. The search history is mentioned.
Methodology 58-53 points
Content is well-organized with headings for each slide and bulleted lists to group related material as needed. Use of font, color, graphics, effects, etc. to enhance readability and presentation content is excellent. Length requirements of 10 slides/pages or less is met.
Average Score 50-85%
40-38 points More depth/detail for the background and significance is needed, or the research detail is not clear. No search history information is provided.
83-76 points Review of relevant theoretical literature is evident, but there is little integration of studies into concepts related to problem. Review is partially focused and organized. Supporting and opposing research are included. Summary of information presented is included. Conclusion may not contain a biblical integration.
52-49 points Content is somewhat organized, but no structure is apparent. The use of font, color, graphics, effects, etc. is occasionally detracting to the presentation content. Length requirements may not be met.
Poor Quality 0-45%
37-1 points The background and/or significance are missing. No search history information is provided.
75-1 points Review of relevant theoretical literature is evident, but there is no integration of studies into concepts related to problem. Review is partially focused and organized. Supporting and opposing research are not included in the summary of information presented. Conclusion does not contain a biblical integration.
48-1 points There is no clear or logical organizational structure. No logical sequence is apparent. The use of font, color, graphics, effects etc. is often detracting to the presentation content. Length requirements may not be met
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MBA 640 Creation of an External Capital Funding Proposal