Scenario: Using the situation from SLP2, recall that you are deciding between two investments. However, they each require a different initial investment amount. And you also have a third option, to invest in a 10 year municipal bond with a very high return. Here are the investment options with the augmented data.

Option A: Real estate development. This is a risky opportunity with the possibility of a high payoff, but also with no payoff at all. You have reviewed all of the possible data for the outcomes in the next 10 years and these are your estimates of the Net Present Value of the cash flow and probabilities.

Required initial investment: $0.75 million

High NPV: $5 million, Pr = 0.5

Medium NPV: $2 million, Pr = 0.3

Low NPV: $0, Pr = 0.2

Option B: Retail franchise for Just Hats, a boutique type store selling fashion hats for men and women. This also is a risky opportunity but less so than option A. It has the potential for less risk of failure, but also a lower payoff. You have reviewed all of the possible data for the outcomes in the next 10 years and these are your estimates of the Net Present Value of the cash flow and probabilities.

Required initial investment: $0.55 million

High NPV: $3 million, Pr = 0.75

Medium NPV: $2 million, Pr = 0.15

Low NPV: $1 million, Pr = 0.1

Option C: High Yield Municipal Bonds. This option has low risk and is assumed to be a Certainty. So there is only one outcome with probability of 1.0
Required initial investment: $0.75 million
NPV: $1.5 million, Pr = 1.0

Assignment

Develop an analysis of these three investments. Use expected NPV to determine which of these you should choose. Be sure to include all cash flows to generate the total NPV of each alternative. Do your analysis in Excel using decision tree.

Write a report to your private investment company and explain your analysis and your recommendation. Provide a rationale for your decision.

Upload both your written report and Excel file with the decision tree analysis to the SLP 3 Dropbox.

BONUS (2.0 pts): If the two options A and B could be made to be equal, what would have to change in the NPVs in Option A to make it equal to Option B?
Instruction files

bus520_mod_3_slp_assignment.docx(106,55 KiB)

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eek2 -Global Business Strategy Formulation Assignments Assignment #1-Regional Integration for and Against Articles Instructions: Choose a trading bloc (NAFTA, EU, ASEAN, etc.) and a specific country within that trading bloc. Write a minimum 700 word paper discussing the advantages and disadvantages of regional integration. Describe: The advantages and disadvantages of regional integration to your specific country. Discuss what the impact has been to your country due to being regionally integrated. Relate the stage of economic development to existing or potential business opportunities based upon the regional integration of your selected country. Format your written paper consistent with APA 6th edition guidelines and submit to the Assignments page. Click the Assignment Files tab to submit your assignment. SupportingMaterial:Week 2 Grading Rubric Assignment #2-Comprehensive Venture Analysis Instructions: Select a product and a country for a global business venture. Conduct a regional, country, and product analyses for your new global venture. Prepare a minimum 1,050 word paper discussing the following: Region Analysis Regional alliances and economic integration Physical environment and its impact on trade Political stability Economic conditions Finance options available Social, health, and environmental conditions Terrorism threats Country Analysis Political stability Economic conditions Finance options available Physical environment and its impact on trade Social, health, and environmental conditions Cultural considerations Organization and product or service analysis Description of your organization Product needs assessment of the target country Description of product to meet the need Format your written paper consistent with APA 6th edition guidelines. Click the Assignment Files tab to submit your assignment. SupportingMaterial:Week 2 Team Grading Rubric Week3 -Strategic Implementation: Global Business Operations Assignments Assignment #1-Country Risk and Strategic Planning Analysis Paper Instructions: Prepare a minimum 2000 word paper in which you conduct a country risk analysis for your selected global business venture. Analyze the following risks in your paper: Risk Analysis to include: Political, legal, and regulatory risks Exchange and repatriation of funds risks Competitive risk assessment Taxation and double taxation risks Market risks (four Ps) Distribution and supply chain risks Physical and environmental challenges to entering and operating in a target market Social and cultural risks Cyber or technology Summarize your strategic planning process, include: Define and clarify mission and objectives SWOTT analysis of target country Make strategy selection Select and justify an appropriate mode of entry for your global product or service Control and evaluation Devise contingency plan Describe how you would manage these risks Format your paper consistent with APA 6th edition guidelines. Post your Week 3 Learning Team Peer Evaluation to instructor in your Private forum. Click the Assignment Files tab to submit your assignment. SupportingMaterial:Week 3 Team Grading Rubric Week4 Strategy Implementation: Finance and Marketing in Global Business Assignments Assignment #1-Case Study Instructions: Select one of the following cases: Nike: The Sweatshop Debate The Russian Ruble Crisis and Its Aftermath IKEA: Furniture Retailer to the World” Write a minimum 500 word paper in which you address the following topics: Describe the legal, cultural, and ethical challenges that confront the global business presented in your selected case study. Determine the various roles that host governments played in this particular global business operation. Summarize the strategic and operational challenges facing global managers illustrated in your selected case. Format your paper consistent with APA 6th edition guidelines. Click the Assignment Files tab to submit your assignment. SupportingMaterial:Nike: The Sweatshop DebateThe Russian Ruble Crisis and Its AftermathIKEA: Furniture Retailer to the WorldWeek 4 Grading Rubric Week5 Changing Environment of Global Business Assignments Assignment #1Global Financing and Exchange Rate Mechanisms Instructions: Choose one of the following topics. Prepare a minimum 1,050 word paper in which you analyze one of the following global financing and exchange rate topics: Purchasing power parity and the Big Mac index Currency hedging Hard and soft currencies Countertrade Financing via letters of credit and EXIM Bank and commercial banks Tariff and nontariff barriers Roles of international financial institutions (e.g. IMF, World Bank, ADB, etc.) Euro currency markets Define your selected topic. Explain how your topic is used in global financing operations and describe its importance in managing risks. Format your paper consistent with APA 6th edition guidelines. Click the Assignment Files tab to submit your assignment. SupportingMaterial:Week 5 Grading Rubric Assignment #2-Final Global Business Plan Paper Instructions: Prepare a minimum 7,000 word paper integrating your previous Learning Team assignments to include the following new material: Integrate previous Learning Team assignments correcting errors as reported by instructor in returned papers. Include the rationale for selecting your target country. Refer to your Learning Team Country Risk Analysis for highlights. Determine the marketing mix specific to your selected global product or service and explain your choice of marketing mix. Prepare a marketing plan that addresses product modification, pricing, promotional programs, distribution channels, and e-business in your chosen country. Include market indicators and trends for your product or service. Prepare a financial overview for your global venture. Include a chart that represents the general budget for your global venture. Explain how your company deals with foreign exchange risk for your global operation. Identify potential domestic and international sources of financing for your global venture. Include at least two possible financial institutions within your chosen region. Describe the degree to which your organization operates as a centralized versus decentralized organization. Include a chain of command chart to illustrate how communications would reach senior management from the field when events necessitate changes in tactics or strategy. What types of exit strategies would be most appropriate for your global venture? Some strategies to consider include divestiture of assets, handing over to a joint venture partner, diversification, shutting down operation, and contingencies for your global venture. Based on your findings, make final recommendations about the feasibility of this global venture. Would you recommend proceeding with this global venture? Explain why or why not. Format your paper consistent with APA 6th edition guidelines. Post your Week 5 Learning Team Peer Evaluation to Instructor in your Private forum. Click the Assignment Files tab to submit your assignment. SupportingMaterial:Week 5 Team Grading Rubric

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