Instructions

Lorman Lumber Co. Case Questions

What "wood" you do? Put yourself in Ben Watson's shoes.

Prepare analysis that will guide Lorman's decision on whether or not to make the capital investment in the "closed cycle" system. Use the Excel template in Week 5 to guide you for question 2.

1. What are Ben's responsibilities in this situation?

NOTE: You can apply the general standards in the IMA Statement of Ethical Professional Practice (www.imanet.org/about_ethics_statement.asp) to help you identify specific responsibilities for Ben in this situation.

2. Perform an economic cost-benefit analysis of whether or not capital should be invested in the "closed cycle" system. Clearly state your decision and conclusion from your analysis. Prepare a net present value (NPV) analysis and a payback period analysis as part of your economic analysis. (The NPV and payback period analyses can be organized neatly in an appendix to your case analysis. A reader of your case should be able to follow your work and computations. You can use an Excel spreadsheet. The results of your appendix analyses can be referenced in the body of your case to support your decision.)

3. Assess the impacts of your decision:

- What benefits/harms result and to whom?

- What rights are being exercised (denied) and by (to) whom?

- Do these impacts modify or change your decision? How?