Assignment: Suppose that Liz and David have hired you as a consultant to help them make the decision. Please draft an official memo to them with your analysis and recommendations.

Your submission should cover the following questions:

1. Briefly, summarize the key facts of the case and identify the problem being faced by our two budding entrepreneurs. In other words, what is the decision that they need to make? (10 points) An excellent paper will demonstrate the ability to construct a clear and insightful problem statement while identifying all underlying issues.

2. What are some approaches that can be used to solve this problem? What are some various criteria or metrics that can be used to help make this decision? (10 points) An excellent paper will propose solutions that are sensitive to all the identified issues.

3. a) Rank the projects based on each of the following metrics: Payback period, Discounted payback period, NPV, IRR, Profitability Index, and MIRR. (10 points)

b) David believes that the best approach to make the decision is the NPV approach. However, Liz is not so sure that ignoring the other metrics is a good idea. Which of the approaches or metrics would you propose? In other words, would you prefer one or more of these approaches over the others? Explain why. (20 points) An excellent paper will include an evaluation of solutions containing thorough and insightful explanations, feasibility of solutions, and impacts of solutions.

4. a) Which of these projects would you recommend? Explain why. (10 points)

b) Briefly state the limitations of the approach you used in making this decision, and outline what further analysis you would recommend.