Elaine Shumate has been working for GSM for 7 years. In preparing for a meeting she looks over the company's earlier cost estimate and operating income projections for the project. Records indicate that the estimated research and development costs are $140 million, and the annual operating income is expected to be approximately $25 million. Given the latest results, MIP may have few applicants in the pharmaceutical industry than original believed.

Elaine gets updated information for potential market value for MIP. Richard suggests that MIP would likely generate operating income of just $17.5 million per year. if the recent results holdup after further testing. Elaine know s that Blake in not going to be happy. Blake is scheduled to meet with the the company board next week to discuss the need for additional investment capital form the venture capitalists in the next year and the company's plans for public stock offering in the next several years. Elaine stands to benefit substantially form stock options if the company goes public. GSM's future may ride on the outcome of that meeting

A. What is the ROI for MIP given the original estimates?

What is the ROI if Richard new revenue projections are used?

B. What advise would you give her?

C. What responsibilities does Elaine have to other GSM employees , the board of directors, and the venture capitalists?