Recommendation to the capital budgeting committee
To begin with, the projections made for the company seem to be achievable as revealed by the metrics used to measure the viability of the investment in the Doll Company. For instance, it is evident that the payback period will be 7. 4 years, which is fairly good for the shareholders. The discounting methods, which include IRR and the NPV, give promising figures that predict a good position of the Company. With 8% and $7,150. A major weakness that can be pointed out is that the New Heritage’s dolls and accessories are majorly concerned with girl child. As it can be observed, the little children, regardless of the gender, are interested in dolls. Therefore, all can make a good market. That is a gap that needs to be filled to satisfy children from both genders.
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