Company financial risk

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Note: The risks (and opportunities) you identify should demonstrate your understanding of the company you selected, the industry, the investment project you are proposing, and your project’s country and timing. Your estimates of financial impacts will be only preliminary; you will most likely revise them in your final submission at the end of Module Nine.

Specifically, the following critical elements must be addressed: Section IV Risks:

1. Internal. What are the company’s most significant internal risks and opportunities related to the project? How might they affect your financial estimates and how will you address them? Support your response with specific examples.

2. External. How will you address significant qualitative risks outside the company that might affect project success? Give specific examples. For example, how might culture or politics in the target country affect the proposed investment’s financial success? Natural disasters? How have you planned for these risks?

3. Microeconomic. Assess the microeconomic factors that might affect decisions about the proposed investment. Support your response with specific examples. For example, how competitive is the market you will be entering? How elastic is the price for your product or service?

4. Alternate financial scenarios. Use this section to discuss the sensitivity of your financial projections to different scenarios. Be sure to address:

a. How would your projected financial performance change if sales fall 20% short of or are 20% higher than your base assumption? What does your analysis of these two scenarios imply for the proposed investment? Justify your response.

b. What do the net present value, internal rate of return, and payback values from your base scenario and the sales variation scenarios above imply for the proposed investment? Be sure to explain how the time value of money affects your calculations and analysis.

Rubric

Critical Elements	Proficient (100%)	Needs Improvement (75%)	Not Evident (0%)	Value
Risks: Internal	Projects how company’s most significant internal risks and opportunities might affect financial estimates and how they will be addressed, supported by specific examples	Projects how company’s most significant internal risks and opportunities might affect financial estimates and how they will be addressed, supported by specific examples, but response contains inaccuracies, omits key details, or links between projections and planning are tenuous	Does not project how company’s most significant internal risks and opportunities might affect financial estimates and how they will be addressed	18
Risks: External	Evaluates how significant external, non-financial risks that might affect project success will be addressed, giving specific examples	Evaluates how significant external, non-financial risks that might affect project success will be addressed, giving specific examples, but response contains inaccuracies, omits key details, or examples are not relevant	Does not evaluate how significant external, non-financial risks that might affect project success will be addressed	18
Risks: Microeconomic	Assesses the microeconomic factors that might affect decisions about the proposed investment, supported by specific examples	Assesses the microeconomic factors that might affect decisions about the proposed investment, supported by specific examples, but response contains inaccuracies, omits key details, or examples are not relevant	Does not assess the microeconomic factors that might affect decisions about the proposed investment	18

Risks: Alternate Financial: Sales Fall	Projects how financial performance would change if sales fall 20% short of or are 20% higher than base assumption, including what analysis of two scenarios implies for the proposed investment, justifying response	Projects how financial performance would change if sales fall 20% short of or are 20% higher than base assumption, including what analysis implies for the proposed investment, but response contains inaccuracies, omits key details, or is poorly justified	Does not project how financial performance would change if sales fall 20% short of or are 20% higher than base assumption	18
Risks: Alternate Financial: Time Value of Money	Assesses what net present value, internal rate of return, and payback values from base and sales variation scenarios imply for the proposed investment, including how time value of money affects calculations and analysis	Assesses what net present value, internal rate of return, and payback values from base and sales variation scenarios imply for the proposed investment, including how time value of money affects calculations and analysis, but response contains inaccuracies or omits key details	Does not assess what net present value, internal rate of return, and payback values from base and sales variation scenarios imply for the proposed investment	18
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	10
Total	100%