Discuss any risks that might affect the success of the project and how you have planned for those contingencies.
Note: The risks (and opportunities) you identify should demonstrate an understanding of the company (Nordstrom, Inc.) you selected, the industry, the investment project you are proposing, and your project’s country and timing. Estimates of financial impacts will be only preliminary; and will most likely be revised later.
Specifically, the following critical elements must be addressed:
Section – 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.
Guidelines for Submission: Paper should be approximately 8-10 pages in length (excluding any tables, other exhibits, and list of references as necessary). It should be double-spaced with 12-point Times New Roman font and one-inch margins, and should use APA format for references and citations.
