New Heritage Doll
Overview
The heritage doll company is the US
established cooperation that has for long
being involved in the toys and games
sector since the 1980´s.Their targeted
market is divided into two broad
segment that is the video games segment
(48%)through electronic platform
whereas the rest of their markets like
traditional toys and games. They produce
toys that are suit for their customer’s
segments. There has been a shift in their
company profit from 2012 that has
allowed the company to venture into the
new opportunity.
Investment opportunity
Emily Harris who is the current
organization vice president to the new
heritage doll company has come up with
two expansion proposal for the
production sector thus will increase the
way to operate. The two-brilliant
entrepreneurial which is also innovative
plan that she raises are;
1. “Match my Doll Clothing Line.”
2. “Design Your Own Doll”.
Due to the limited resource from the
company the company committee might
only have one of the project done. Thus,
the manager will be in a good condition
to conduct some analytics of the project
to see which will be feasible and will be
of much impact to the company
 free cash flow
30000
25000
20000
15000
10000
5000
0
-5000
-10000
2011 2012 2013
MMDCL -3020 -557.18 168.97 682.19 540.95 583.29 629.99 680.31 734.7 793.4 26120
DYOD -5330 -1261 306.05 -309 -1189.6 1141 1141.38 1209.8 1282.6 1359.42 26178.89
Series 3 3 5

MMDCL DYOD Series 3

evaluation will be access on the

underlying fundamental assumption
• their ought to be 3% working capital
• The high risk of doing the operation
due to innovation and start of the design
your own doll to be assessed at 9.0%
whereas the small risk of the 1st project
to be estimated at 7.7%
• the risk of Taxes assumption is at Table2.3 continuation
40%
• Discount rate at 8.4%
• We assumed That cash flow forecast,
and capital is obtained from a given
operation projection

The below diagram is a free cash flow

in the making of the decision of which type of
statistic project that should be taken as per free cash flow
Table 2.3 will depend on the project that takes the shortest
time to bring a positive return and by the data
from my table below. “Match my Doll Clothing
Line” will fast bring back the revenue and this
will make me choose it over the others

evaluation based on NPV, IRR,
Payback Period and PI:
Net Present Value
From the table below the net present of the two-
project different from one another and the
decision to choose the best method in accordance
to the two is to look at the one with the higher
net present value among the two
Look and analyzing the table above we can see
that the MMDCL has a high NPV over the
DYOD: So I will accept the MMDCL over the
other DYOD
Sales
MMDCL DYOD
IRR
Internal rate of return is sometimes done and
written in percentage and its where the Highers
value in term of the highest proportion is
accepted and in our case we ought to accepted or
agreed that we will take the “Match my Doll
Clothing Line” because it has a percentage of
24% and leave the other one of the “Design Your
Own Doll” which has a lower percentage of
18%.
years
18%
24%
MMDCL DYOD
Payback period
In payback period the decision to accept a given
project will primarily involve the shortest time
for the project to pay back it cash and from the
look of thing is that “Match my Doll Clothing
Line will return 7.39year which is less than the
time frame of the Design Your Own Doll which
take 9.05 years which is a long time thus we will
again choose the former over the later
PI
Profitability index will be determined by the
project that is higher than the other once, and it
is more less the same to the NPV in term of its
excellent characteristics. Thus why we shall
choose MMDCL which has a value of above 3
and leave the other DYOD which value is
roughly around 2
Recommendation
With the two-project having analysis them in
dark detail I would highly recommend the
“Matching my doll clothing line” for the above
company this is due to how less it is position in
term of its finances. The project take less time to
implicates and this main that the break-even
period will earn and it will be first at stabilizing
itself and also the project will require less of the
require capital than the DYOD
In term of risk assessment is that MMDCL is
less risky as it has been in the market for a long
time, improving the product is very easy and the
company has known the market acceptance of
the product over the other product which is new
to the market, has high risk because the market
share can reject it, this will slowly sit on the
company resources