Assignment 3: Capstone Research Project

Due Week 10 and worth 410 points

Project Parameters:
You have been selected as the consultant to develop a business plan for Durango Manufacturing Company, which is a
start-up, medium-sized public manufacturing company. The CEO has a background in manufacturing and is well versed in
supply chain management. However, the CEO has limited experience in financial management and creating value for the
various stakeholder groups. Your business plan must include a five (5) year strategy to increase revenues by 10% and a
recommendation for creating an organizational structure to comply with SOX mandates for strong corporate governance
over the internal controls. Your business plan must also include prescriptions for creating an ethical environment. Your
recommendation must be approved by the Board of Directors before the company can begin its operations.

Based on your knowledge of accounting and financial, prepare a ten to twelve (10-12) page report in which you:

1. As the consultant, create an argument that you will present to the CEO that suggests accounting and financial management knowledge and skills will be
essential to the company’s success and stability over the next five (5) years. Provide support for your argument.
2. Suggest to the CEO how the company’s stakeholders (investors, lenders, and employees) will use financial statement information and ratio calculations
to make key determinations related to the financial condition and operational efficiency of the company. Provide support for your rationale.
3. Given the strategy to increase revenue during the five (5) year plan period, which will need to be achieved through expansion and capital expenditures,
determine which capital budgeting ratio is appropriate for Durango to evaluate its proposals for capital expenditures, such as NPV, IRR, etc. Defend your
position.
4. In order for the company to improve its operational efficiency, recommend which production departments should use process, job order, and activity-
based costing—all three (3) of which must be implemented within Durango. Defend your choice for each department.
5. The CEO would like to consider outsourcing his manufacturing operations if labor can be supplied cheaper overseas than in the U.S. Create an argument
either for or against outsourcing the manufacturing operation to a foreign country. Your argument should include key points that support your position.
The key points should address economic and business management aspects related to outsourcing.
6. Predict the economic and business environment over the next five (5) years, indicating at least two (2) ways it may impact Durango Manufacturing
Company’s ability to achieve the desired 10% growth in revenue. Provide support for your prediction.
7. Formulate a strategy to improve the opportunities for Durango to reach its revenue goals (i.e., increase revenue by 10% within five [5] years).
8. Assess the potential for fraud within Durango based on the lack of IT controls and determine at least two (2) ways Durango will structure its internal IT
controls to ensure that such controls are effective in detecting fraudulent transactions.
9. Use at least six (6) quality academic resources in this assignment. Note: Wikipedia and other Websites do not qualify as academic resources.
Your assignment must follow these formatting requirements:

 Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-
specific format. Check with your professor for any additional instructions.
 Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and
the reference page are not included in the required assignment page length.
 The specific course learning outcomes associated with this assignment are:

 Analyze financial reports, prepare analysis, and draw conclusions based on the financial analysis
 Calculate and interpret various financial and operating ratios used in business.
 Apply activity-based costing and other managerial accounting concepts to various business situations.
 Evaluate capital budgeting situations by calculating financial returns and drawing appropriate conclusions.
 Evaluate internal controls within an organization and create a risk assessment.
 Analyze ethical theories to evaluate a decision-making process to determine compliance with professional codes of ethics.
 Evaluate the health of organizations to assess the level of risk in an audit engagement.
 Evaluate financial data for potential fraud and prepare an audit approach for detecting fraud.
 Assess the risk of financial misstatement in an IT-based environment.
 Evaluate financial data for potential fraud and determine the business relationships contributing to the fraudulent reporting.
 Use technology and information resources to research issues in accounting management.
 Write clearly and concisely about accounting management using proper writing mechanics.
Click here to view the grading rubric for this assignment.

Grading for this assignment will be based on answer quality, logic / organization of the paper, and language and writing skills, using the following
rubric.

Points: 410 Assignment 3: Capstone Research Project

Unacceptable Fair Proficient Exemplary
Criteria
Below 70% F 70-79% C 80-89% B 90-100% A
1. As the consultant, Did not submit or Partially created an Satisfactorily created an Thoroughly created an
create an argument incompletely argument that you will argument that you will present to argument that you will present
that you will present created an present to the CEO that the CEO that suggests to the CEO that suggests
to the CEO that argument that you suggests accounting and accounting and financial accounting and financial
suggests accounting will present to the financial management management knowledge and management knowledge and
and financial CEO that suggests knowledge and skills will be skills will be essential to the skills will be essential to the
management accounting and essential to the company’s company’s success and stability company’s success and stability
knowledge and skills financial success and stability over over the next five (5) years, as over the next five (5) years, as
will be essential to management the next five (5) years, as the the
the company’s knowledge and skills the consultant. Satisfactorily provided consultant. Thoroughly provided
success and stability will be essential to consultant. Partially provided support for your argument. support for your argument.
over the next five (5) the company’s support for your argument.
years. Provide success and stability
support for your over the next five (5)
argument. years, as the
consultant. Did not
Weight: 5% submit or
incompletely
provided support for
your argument.
2. Suggest to the Did not submit or Partially suggested to the Satisfactorily suggested to the Thoroughly suggested to the
CEO how the incompletely CEO how the company’s CEO how the company’s CEO how the company’s
company’s suggested to the stakeholders (investors, stakeholders (investors, lenders, stakeholders (investors,
stakeholders CEO how the lenders, and employees) will and employees) will use financial lenders, and employees) will
(investors, lenders, company’s use financial statement statement information and ratio use financial statement
and employees) will stakeholders information and ratio calculations to make key information and ratio
use financial (investors, lenders, calculations to make key determinations related to the calculations to make key
statement and employees) will determinations related to the financial condition and determinations related to the
information and ratio use financial financial condition and operational efficiency of the financial condition and
calculations to make statement operational efficiency of the company. Satisfactorily provided operational efficiency of the
key determinations information and ratio company. Partially provided support for your rationale. company. Thoroughly provided
related to the calculations to make support for your rationale. support for your rationale.
financial condition key determinations
and operational related to the
efficiency of the financial condition
company. Provide and operational
support for your efficiency of the
rationale. company. Did not
Weight: 5% submit or
incompletely
provided support for
your rationale.
3. Given the strategy Did not submit or Partially determined which Satisfactorily determined which Thoroughly determined which
to increase revenue incompletely capital budgeting ratio is capital budgeting ratio is capital budgeting ratio is
during the five (5) determined which appropriate for Durango to appropriate for Durango to appropriate for Durango to
year plan period, capital budgeting evaluate its proposals for evaluate its proposals for capital evaluate its proposals for
which will need to be ratio is appropriate capital expenditures, such expenditures, such as NPV, IRR, capital expenditures, such as
achieved through for Durango to as NPV, IRR, etc., given the etc., given the strategy to NPV, IRR, etc., given the
expansion and evaluate its strategy to increase revenue increase revenue during the five strategy to increase revenue
capital expenditures, proposals for capital during the five (5) year plan (5) year plan period, which will during the five (5) year plan
determine which expenditures, such period, which will need to be need to be achieved through period, which will need to be
capital budgeting as NPV, IRR, etc., achieved through expansion expansion and capital achieved through expansion
ratio is appropriate given the strategy to and capital expenditures. expenditures. Satisfactorily and capital expenditures.
for Durango to increase revenue Partially defended your defended your position. Thoroughly defended your
evaluate its during the five position. position.
proposals for capital (5)year plan period,
expenditures, such which will need to be
as NPV, IRR, etc. achieved through
expansion and
capital expenditures.
Defend your Did not submit or
position. incompletely
defended your
Weight: 5% position.
4. In order for the Did not submit or Partially Satisfactorily Thoroughly
company to improve incompletely recommended which recommended which production recommended which production
its operational recommended which production departments departments should use process, departments should use
efficiency, production should use process, job job order, and activity-based process, job order, and activity-
recommend which departments should order, and activity-based costing—all three (3) of which based costing—all three (3) of
production use process, job costing—all three (3) of must be implemented within which must be implemented
departments should order, and activity- which must be implemented Durango, in order for the within Durango, in order for the
use process, job based costing—all within Durango, in order for company to improve its company to improve its
order, and activity- three (3) of which the company to improve its operational efficiency. operational efficiency.
based costing—all must be operational efficiency. Satisfactorily defended your Thoroughly defended your
three (3) of which implemented within Partially defended your choice for each department. choice for each department.
must be Durango, in order for choice for each department.
implemented within the company to
Durango. Defend improve its
your choice for each operational
department. efficiency. Did not
submit or
Weight: 15% incompletely
defended your
choice for each
department.
5. Create an Did not submit or Partially created an Satisfactorily created an Thoroughly created an
argument either for incompletely argument either for or argument either for or against argument either for or against
or against created an against outsourcing the outsourcing the manufacturing outsourcing the manufacturing
outsourcing the argument either for manufacturing operation to a operation to a foreign operation to a foreign
manufacturing or against foreign country. Satisfactorily included country. Thoroughly included
operation to a outsourcing the country. Partially included key points that support your key points that support your
foreign country. Your manufacturing key points that support your position. Satisfactorily addressed position. Thoroughly addressed
argument should operation to a position. Partially addressed economic and business economic and business
include key points foreign country. Did economic and business management aspects related to management aspects related to
that support your not submit or management aspects outsourcing. outsourcing.
position. The key incompletely related to outsourcing.
points should included key points
address economic that support your
and business position. Did not
management submit or
aspects related to incompletely
outsourcing. addressed economic
and business
Weight: 15% management
 aspects related to
outsourcing.
6. Predict the Did not submit or Partially predicted the Satisfactorily predicted the Thoroughly predicted the
economic and incompletely economic and business economic and business economic and business
business predicted the environment over the next environment over the next five (5) environment over the next five
environment over economic and five (5) years, indicating at years, indicating at least two (2) (5) years, indicating at least two
the next five (5) business least two (2) ways it may ways it may impact Durango (2) ways it may impact Durango
years, indicating at environment over impact Durango Manufacturing Company’s ability Manufacturing Company’s
least two (2) ways it the next five (5) Manufacturing Company’s to achieve the desired 10% ability to achieve the desired
may impact Durango years, indicating at ability to achieve the desired growth in revenue. Satisfactorily 10% growth in revenue.
Manufacturing least two (2) ways it 10% growth in revenue. provided support for your Thoroughly provided support for
Company’s ability to may impact Durango Partially provided support for prediction. your prediction.
achieve the desired Manufacturing your prediction.
10% growth in Company’s ability to
revenue. Provide achieve the desired
support for your 10% growth in
prediction. revenue. Did not
submit or
Weight: 10% incompletely
provided support for
your prediction.
7. Formulate a Did not submit or Partially formulated a Satisfactorily formulated a Thoroughly formulated a
strategy to improve incompletely strategy to improve the strategy to improve the strategy to improve the
the opportunities for formulated a opportunities for Durango to opportunities for Durango to opportunities for Durango to
Durango to reach its strategy to improve reach its revenue goals (i.e., reach its revenue goals (i.e., reach its revenue goals (i.e.,
revenue goals (i.e., the opportunities for increase revenue by 10% increase revenue by 10% within increase revenue by 10% within
increase revenue by Durango to reach its within five [5] years). five [5] years). five [5] years).
10% within five [5] revenue goals (i.e.,
years). increase revenue by
10% within five [5]
Weight: 15% years).
8. Assess the Did not submit or Partially assessed the Satisfactorily assessed the Thoroughly assessed the
potential for fraud incompletely potential for fraud within potential for fraud within Durango potential for fraud within
within Durango assessed the Durango based on the lack based on the lack of IT controls; Durango based on the lack of IT
based on the lack of potential for fraud of IT controls; partially satisfactorily determined at least controls; thoroughly determined
IT controls, and within Durango determined at least two (2) two (2) ways Durango will at least two (2) ways Durango
determine at least based on the lack of ways Durango will structure structure its internal IT controls to will structure its internal IT
two (2) ways IT controls; did not its internal IT controls to ensure that such controls are controls to ensure that such
Durango will submit or ensure that such controls effective in detecting fraudulent controls are effective in
structure its internal incompletely are effective in detecting transactions. detecting fraudulent
IT controls to ensure determined at least fraudulent transactions. transactions.
that such controls two (2) ways
are effective in Durango will
structure its internal
detecting fraudulent IT controls to ensure
transactions. that such controls
are effective in
Weight: 15% detecting fraudulent
transactions.
9. 6 references No references Does not meet the required Meets number of required Exceeds number of required
provided number of references; some references; all references high references; all references high
Weight: 5% or all references poor quality quality choices. quality choices.
choices.
10. Clarity, writing More than 6 errors 5-6 errors present 3-4 errors present 0-2 errors present
mechanics, and present
formatting
requirements

Weight: 10%