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The president of a small water filtration company is considering expanding his operations to include membrane biological reactors (MBRs). The topic of future-oriented decision-making using the differential cash flow is introduced. Students are asked to (1) qualitatively evaluate the filtration industry and decide whether this is the right time for the company to expand to MBRs; (2) perform a business size-up of the company and its competitors and determine whether the company is well positioned to expand at this time; (3) analyze the expansion opportunity qualitatively; (4) list all cash flows associated with the expansion and classify them as relevant (future, cash and different), and either recurring or one-time costs; (5) perform a differential analysis, with sensitivity where necessary and (6) determine the return on investment and the payback period.

The president of a small Toronto, Ontario consulting firm specializing in sponsorship and experimental marketing looks at adding a public relations division to the firm. Students are required to analyze the external environment, identify corporate strengths and weaknesses, identify qualitative pros and cons, prepare projected statements, look at the timeliness of the option, and evaluate the business plan before arriving at a final decision.

The president of a small Toronto, Ontario consulting firm specializing in sponsorship and experimental marketing looks at adding a public relations division to the firm. Students are required to analyze the external environment, identify corporate strengths and weaknesses, identify qualitative pros and cons, prepare projected statements, look at the timeliness of the option, and evaluate the business plan before arriving at a final decision.