In December 2022, Steve Noakes, Board Chair of Binna Burra Lodge Ltd, Queensland, Australia learned that they had received government funding of AU$18 million to reconstruct the Lodge and cabins lost in the 2019 bushfires. The timeframe was tight for this major re-build which would need to adhere to a safer, more sustainable, and fire-resistant materials. They were also committed to re-building with a stronger Binna Burra spirit that would include the meaningful involvement of the local community, including the local Indigenous population, the Yugambeh languages people, but it also had to be financially viable.
In December 2022, Steve Noakes, Board Chair of Binna Burra Lodge Ltd, Queensland, Australia learned that they had received government funding of AU$18 million to reconstruct the Lodge and cabins lost in the 2019 bushfires. The timeframe was tight for this major re-build which would need to adhere to a safer, more sustainable, and fire-resistant materials. They were also committed to re-building with a stronger Binna Burra spirit that would include the meaningful involvement of the local community, including the local Indigenous population, the Yugambeh languages people, but it also had to be financially viable.
Innovation in aged care offers opportunities to create positive and inclusive change. Globally, healthcare systems are realizing the importance of customer-focused care, especially, when funding is limited. Residential aged care providers have traditionally focused on ensuring the health and safety of their residents. However, there are opportunities to address residents’ needs and enhance their well-being without compromising their health and safety. The case explores a not-for-profit healthcare service organization seeking to make improvements to meals that will improve nutrition, but do not require a significant financial investment. This case examines the role of food and nutrition and also positions the dining experience as a mediator for residents’ quality of life.
Innovation in aged care offers opportunities to create positive and inclusive change. Globally, healthcare systems are realizing the importance of customer-focused care, especially, when funding is limited. Residential aged care providers have traditionally focused on ensuring the health and safety of their residents. However, there are opportunities to address residents' needs and enhance their well-being without compromising their health and safety. The case explores a not-for-profit healthcare service organization seeking to make improvements to meals that will improve nutrition, but do not require a significant financial investment. This case examines the role of food and nutrition and also positions the dining experience as a mediator for residents' quality of life.
Nicole Rotumah, chair of the Tweed Aboriginal Co-operative Society Limited, which ran the Minjungbal Museum and Cultural Centre (MMCC) in Tweed Heads, Australia, and the museum manager, Tina Pidcock, were standing in the middle of their beloved museum looking at the worn flooring, dusty artifacts, general state of disrepair, and stark absence of visitors. It was August 2020 and the COVID-19 pandemic had brought tourism to a standstill. However, both Rotumah and Pidcock knew that the museum’s problems ran far deeper than the absence of visitors during the pandemic, and that something had to be done to revitalize this Australian cultural treasure. The question was what. Was MMCC functioning in the museum, tourism, or cultural experience industry? Who were its main stakeholders and competitors? Was it correct to measure success according to revenue or the number of visitors, or was protecting cultural heritage a sufficient goal?
Nicole Rotumah, chair of the Tweed Aboriginal Co-operative Society Limited, which ran the Minjungbal Museum and Cultural Centre (MMCC) in Tweed Heads, Australia, and the museum manager, Tina Pidcock, were standing in the middle of their beloved museum looking at the worn flooring, dusty artifacts, general state of disrepair, and stark absence of visitors. It was August 2020 and the COVID-19 pandemic had brought tourism to a standstill. However, both Rotumah and Pidcock knew that the museum's problems ran far deeper than the absence of visitors during the pandemic, and that something had to be done to revitalize this Australian cultural treasure. The question was what. Was MMCC functioning in the museum, tourism, or cultural experience industry? Who were its main stakeholders and competitors? Was it correct to measure success according to revenue or the number of visitors, or was protecting cultural heritage a sufficient goal?
In early October 2022, the ASX-listed mineral exploration company Sheffield Resources announced its final investment decision to proceed with the Thunderbird mineral sands project, its only project under development. Olivia Montalbano's investment banking firm had decided to provide coverage of Sheffield's stock and asked her to determine a fair value estimate. The investor's bankable feasibility study (BFS) provided an estimate of $1.84 per share, but the stock price was only $0.47. What troubled Montalbano was that the BFS employed a real discount rate of 8%, which seemed low, given typical mining project risk. Montalbano's immediate task was to develop her own estimate of the project's cost of capital.
In early October 2022, the ASX-listed mineral exploration company Sheffield Resources announced its final investment decision to proceed with the Thunderbird mineral sands project, its only project under development. Olivia Montalbano’s investment banking firm had decided to provide coverage of Sheffield’s stock and asked her to determine a fair value estimate. The investor’s bankable feasibility study (BFS) provided an estimate of $1.84 per share, but the stock price was only $0.47. What troubled Montalbano was that the BFS employed a real discount rate of 8%, which seemed low, given typical mining project risk. Montalbano’s immediate task was to develop her own estimate of the project’s cost of capital.
In July 2020, the chief executive officer and board chair of Essential Coffee Group based on the Gold Coast, Australia, was perusing the company’s financials. After continuous company growth and a distressed coffee consumption industry due to the COVID-19 pandemic, it was the perfect time to explore inorganic growth opportunities. To continue to compete at a high level in the Australian coffee industry, Essential Coffee Group had to move fast by exploring opportunities to expand horizontally, such as acquiring the analogous coffee bean roasting company Coffee Time Pty Ltd. To determine the feasibility of the transaction, the Essential Coffee Group financial team would need to undertake comprehensive external, internal, and financial analyses. They would also have to complete a discounted cash flow valuation and a precedent transactions analysis to determine an appropriate offer price for the targeted firm.
In 2018, Christopher Hay, president and chief executive officer of Hayco, the top contract manufacturer to the brush industry globally, had been looking for a new location for some of its operations due to over a decade of rising labour costs in Hong Kong, China, where the company was based. The company accelerated its search in response to the US government’s announcement of tariffs against Chinese products in April 2018. Hayco was seeking a location closer to the US and European markets where labour costs were still low for an initial workforce of over one thousand employees and where there was no threat of tariffs. Hay’s focus was on Mexico, the Caribbean, and Central America. Hay considered questions such as, “What is the best market to which Hayco could move its operations? Should it establish a new subsidiary on its own or locate within a special economic zone?”
In 2018, Christopher Hay, president and chief executive officer of Hayco, the top contract manufacturer to the brush industry globally, had been looking for a new location for some of its operations due to over a decade of rising labour costs in Hong Kong, China, where the company was based. The company accelerated its search in response to the US government's announcement of tariffs against Chinese products in April 2018. Hayco was seeking a location closer to the US and European markets where labour costs were still low for an initial workforce of over one thousand employees and where there was no threat of tariffs. Hay's focus was on Mexico, the Caribbean, and Central America. Hay considered questions such as, "What is the best market to which Hayco could move its operations? Should it establish a new subsidiary on its own or locate within a special economic zone?"
When it comes to valuing projects in highly uncertain business environments, real options valuation (ROV) isn’t popular as a management tool despite having long been touted as a best practice in academic circles. Seeking to understand why industry has failed to adopt this best practice, the authors interviewed valuation specialists in finance, consulting, and the mining industry. This article aims to help more industry players see ROV as, well, a real and valuable option by highlighting the case for using real options in highly uncertain business environments and offering recommendations on how to effectively deploy ROV. The authors found that the poor adoption of ROV occurs for three key reasons. First, it happens due to a lack of managerial expertise and knowledge. Second, the ROV computation process is highly complex. Third, communication issues exist because the outcomes of ROV are not easily understood without strong knowledge of the underlying concepts. To overcome these limitations and promote the use of real options, the authors present three recommendations: improve training and education, practice greater transparency, and communicate clearly. In order to facilitate these three recommendations, the authors have developed a new ROV software tool to value commodity-producing projects such as mines or refineries. Their Monte Carlo simulation method approximates the ROV by determining the optimal exercise strategy, enabling users to model complex real options problems that include multiple stochastic variables, early exercise rights, and operational flexibility.
In July 2020, the chief executive officer and board chair of Essential Coffee Group based on the Gold Coast, Australia, was perusing the company's financials. After continuous company growth and a distressed coffee consumption industry due to the COVID-19 pandemic, it was the perfect time to explore inorganic growth opportunities. To continue to compete at a high level in the Australian coffee industry, Essential Coffee Group had to move fast by exploring opportunities to expand horizontally, such as acquiring the analogous coffee bean roasting company Coffee Time Pty Ltd. To determine the feasibility of the transaction, the Essential Coffee Group financial team would need to undertake comprehensive external, internal, and financial analyses. They would also have to complete a discounted cash flow valuation and a precedent transactions analysis to determine an appropriate offer price for the targeted firm.
In early March 2020, CoinOrb needed additional capital to build the minimum viable product for their cryptocurrency futures trading platform. Rather than raise additional equity, the company founders created an initial coin offering (ICO), a token sale that blockchain start-ups use to raise funds. CoinOrb planned to launch their ICO shortly after launching their platform in late 2020, but they first needed to prepare their white paper. How would the CoinOrb founders market their offering to investors? What terms would the ICO have? And what value would they assign to the tokens?