Abstract
The president of a large and established manufacturer of laboratory equipment has to decide whether to invest a million dollars for 30% equity in a start-up company in the field of lab robotics. The agreement would also allow his company the right to market the product. He already has a Lotus spreadsheet that projects the best guess of the future scenario and calculates several measures of performance (ROS, ROE, ROI, NPV, and IRR). He must decide which of the criteria are most useful. A relevant-cost issue that is introduced must be resolved, because it makes a big difference in the NPV. In the supplement some background material is provided for a forecasting/judgmental assessment exercise based on this decision. The supplement could, assuming students have already been introduced to this topic, form the basis for a short workshop (an hour or less) on judgmental probability, or it could be used with a note on cumulative probability distributions for an introductory class on the topic. (The B case is QA-0383, and a supplement to the A case is QA-0384.)
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
