Congratulations, you and your team now work as the CEO of New Heritage Doll Corporation! Your job, as the
CEO, is to create long term value to the owner of the company, who founded this firm and who is now the
Chairwomen of the Board. Her goal is to improve relationships between children, parents and grandparents
through providing them innovative toys and games. The founder cares deeply about families; that includes her
own children and grandchildren; the customers’, and her employees’ families (these are her priority
stakeholders).
After you played the simulation, you will need to submit one formal report per team, to the Board of Directors.
Your report should include the following sections:
Identify the specific simulation run that you, as a team, jointly selected to be the best, to represent all of you
(this particular simulation was played by … as number … run )
Explain how you used financial reports and indicators to support your decisions;
Describe the outcome of your decisions to all the stakeholders that your Board cares about
Conclude your report with a personal statement on what you, as a team, learned from the process; what
worked well and would do different next time.
Your report should be between 1500 and 2000 words plus exhibits (if you made additional calculations that you
want to include). The assignment score will depend on the value you create for the key stakeholders as well as
the quality of the report.
The Finance Simulation: Capital Budgeting simulation is online. All instructions, including a How-To-Play video
and a FOREGROUND READING are included in it. I recommend that you all take good notes during the
simulation and save the data in excel or take screenshots. Each of your team members can play the simulation
separately, or the entire team can play it together, it is up to you. You can only submit one report, which is
based on one simulation run, that your team selects to be the best.
The simulation can be accessed through Modules - Class 8 - Simulation.
When you access the simulation the first time, by launching it from Modules, you need to wait until I assign a
role for you. I will do that periodically, in every 3 hours, so make sure you log in the simulation as soon as you
can. Once you are logged it, and I assigned your role, you are free to play.
Technical Notes:
- The value of the firm is estimated by the simulation, based on your decisions. In the simulation it is called
APV (Adjusted Present Value); which is the same as the net present value of all Free Cash Flows (including
today's investment), but APV allows for changes in the discount rate over time. For our purposes you can just
think of it as the Net Present Value of all Free Cash Flows that you calculated in class 5, described by the
slides "Nonconstant growth stock valuation". - When one round of simulation is completed (2009-2014), a pop-up window will say " Congratulations! Your
company's ending APV is …. Thank you for playing the Capital Budgeting simulation…". It will show 2014
financial results. - You can run more than one run (i.e. 2009-2014) . Once you completed one run, your "Decide" tab will have 2
sentences on the top: " make decisions" and "The simulation has ended.". Click on "make decisions" and you
start a new run of 2009-2014. Previous runs can be seen under "run archive" link, on the bottom of the
"Decide" tab. See the edited screenshot in "Finance Simulation Decide Tab in 2014" pdf file uploaded to
Modules - Class 8 . - Try different browsers, including Firefox if one is not working well. If you have difficulties with Java scripts,
check your browser setting. Microsoft Edge is not recommended. I can use Chrome well. Work with your
teammates, as you only need to complete one run (2009-2014) that the team agrees on to analyze and create
a report about it.
Sample Solution