Strategically, what must Pan-Europa do to keep from
becoming the victim of a hostile takeover? What rows/
categories in Exhibit 2 will thus become critically important in 1993? What should Pan-Europa do now that
they have won the price war? Who should lead the way
2. Using NPV, conduct a straight fi nancial analysis of the
investment alternatives and rank the projects. Which
NPV of the three should be used? Why? Suggest a way
to evaluate the effl uent project.
3. What aspects of the projects might invalidate the ranking you just derived? How should we correct for each
investment’s time value of money, unequal lifetimes,
riskiness, and size?
4. Reconsider the projects in terms of:
• are any “must do” projects of the nonnumeric type?
• what elements of the projects might imply greater or
• might there be any synergies or confl icts between the
• do any of the projects have nonquantitative benefi ts
or costs that should be considered in an evaluation?
5. Considering all the above, what screens/factors might
you suggest to narrow down the set of most desirable
projects? What criteria would you use to evaluate the
projects on these various factors? Do any of the projects
fail to pass these screens due to their extreme values on
some of the factors?
6. Divide the projects into the four Project Profi le Process categories of incremental, platform, breakthrough, and
R&D. Draw an aggregate project plan and array the
projects on the chart.
7. Based on all the above, which projects should the
management committee recommend to the Board of
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