Select a public company and identify two major new products or services the company plans to manufacture or offer. Create a memo recommending one of the two projects to the company’s senior executives and board of directors. The memo will include:

1. A brief description of each product or service being considered;

2. Major assumptions (projected future cash flows, discount rate, etc.) used to create the data used in your evaluation;

3. A final recommendation including the investment criteria(s) used to make the recommendation.

New Product/Service Example

Disney is in the process of simultaneously pursuing two projects expected to cost over $1 billion. The first project is MyMagic+, a technology project at Walt Disney World. MyMagic+’s key element is a rubber bracelet called a MagicBand whose functionality includes a reservation system for theme park rides, theme park tickets, hotel room key, and a credit card. Disney expects the MyMagic+ product to increase in park sales by: encouraging visitors to spend more vacation time at Disney World instead of visiting off-property attractions; make food and souvenir purchases easier to complete and process; and collecting more personal data about visitors facilitating customized sales efforts.

The cost of the MyMagic+ product is estimated in the $1.1-$1.5 billion range.

In addition to the MyMagic+ product Disney is also developing a new theme park in Shanghai. This new resort will include: Shanghai Disneyland, two Disney-themed hotels, and a large retail, dining, and entertainment venue.

The cost of the Disney’s Shanghai Resort is estimated in the $3.7-$4.4 billion range.

Your memo would recommend one of these two projects to Disney’s senior executives and board of directors using investment decision making tools and methodologies.