Risk Assessment
Making analysis of the New Heritage Doll Company. Assuming the role of Emily
Harris, the firm’s financial analyst, your next step in the process is to perform a risk assessment of the two capital budgeting projects being considered. As we are
learning, risk can be identified and quantified, and this is a crucial step in the evaluation of any capital investment project. For this project involving the New
Heritage Doll Company, we will focus on the relevant internal (business) risks that may be present. These risks include marketing, distribution, or technical issues that may compromise the two projects’ success.
For the purpose of weighing each project’s merit, how might these risks be measured and mitigated?
Prompt: To complete this third part of the final project, continue your analysis by conducting a risk assessment. Specifically, you will:
•Identify the potential business risks that apply to the projects being considered by the New Heritage Doll Company,
•Quantify the financial impacts of the risk (i.e., price the risk), and
•Select appropriate methods for mitigating those risks.