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CEO, Worthington Industries ( WOR ) ( a high - technology steel company ) : We try to find the best technology, stay ahead of
CEO, Worthington Industries WORa hightechnology steel company: We try to find the best technology, stay ahead of the competition, and serve the customer...Well make any investment that will pay back quickly...but if it is something that we really see as a must down the road, payback is not going to be that important.
Chairman of Amgen Inc. AMGNa biotech company: You cannot really run the numbers, do net present value calculations, because the uncertainties are really gigantic...You decide on a project you want to run, and then you run the numbers as a reality check on your assumptions Success in a business like this is much more dependent on tracking rather than on predicting, much more dependent on seeing results over time, tracking and adjusting and readjusting, much more dynamic, much more flexible.
Chief financial officer of Merck & Co Inc. MRKa pharmaceutical company: at the individual product levelthe development of a successful new product requires on the order of @ million in R&D spread over more than a decadediscounted cash flow analysis does not become a factor until development is near the point of manufacturing scaleup effort. Prior to that point, given the uncertainties associated with new product development, it would be lunacy in our business to decide that we know exactly whats going to happen to a product once it gets out.
Choose one of the three companies mentioned above or choose your currentfuture company.
Explain the role of capital investment analysis for the company you have chosen.
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