Janet Richards fixes her eyes on those of her partner Gilbert Baker and says firmly, Alright. Lets do it. And with those words, InterCat, a firm founded by Janet and Gilbert that specializes in the design and maintenance of Internet catalogues for small consumer businesses, will be going public. InterCat employs 30 individuals, with the majority of them computer programmers. Many of the employees have followed the high-technology market very closely and have decided that since high-technology firms are more understood and valued in the United States than in other countries, InterCat should issue its stock only in the United States. Five million shares of InterCat stock will comprise this new issue. The task the company has ahead of itself is certainly daunting. Janet and Gilbert know that many steps have to be completed in the process of making an initial public offering. They also know that they need to complete the process within 28 weeks because they need the new capital fairly soon to ensure that InterCat has the resources to capture valuable new business from its competitors and continue growing. They also value a speedy initial public offering because they believe that the window of opportunity for obtaining a good stock price is presently wide openthe public is wild about shopping on the Internet, and few companies offering Web page design services for Internet catalogues have gone public. Because the 28-week deadline is breathing down their necks, Janet and Gilbert decide to map the steps in the process of making an initial public offering. They list each major activity that needs to be completed, the activities that directly precede each activity, the time needed to complete each activity, and the cost of each activity. This list is shown below.

Janet and Gilbert present the list of steps to the employees of InterCat. The head of the finance department, Leslie Grey, is fresh out of business school. She remembers the various project management tools she has learned in business school and suggests that Janet and Gilbert use PERT/CPM analysis to understand where their priorities should lie. a. Draw the project network for completing the initial public offering of InterCat stock. How long is the initial public offering process? What are the critical steps in the process? b. How would the change in the following activities affect the time to complete the initial public offering? Please evaluate each change independently. i. Some members of the syndicate are playing hardball. Therefore, the time it takes to negotiate the commitment of each member of the syndicate increases from two to three weeks. ii. The underwriters are truly math geniuses. Therefore, the time it takes to calculate the issue price decreases to four weeks. iii. Whoa! The SEC found many deficiencies in the initial registration statement. The underwriters must therefore spend 2.5 weeks amending the statement and resubmitting it to the SEC.

iv. The new issue does not comply with the blue sky laws of a handful of states. The time it takes to edit the issue for each state to ensure compliance increases to four weeks. c. Janet and Gilbert hear through the grapevine that their most fierce competitor, Soft Sales, is also planning to go public. They fear that if InterCat does not complete its initial public offering before Soft Sales, the price investors are willing to pay for InterCat stock will drop since investors will perceive Soft Sales to be a stronger, more organized company. Janet and Gilbert therefore decide that they want to complete the process of issuing new stock within 22 weeks. They think such a goal is possible if they throw more resourcesworkers and moneyinto some activities. They list the activities that can be shortened, the time the activity will take when it is fully shortened, and the cost of shortening the activity this much. They also conclude that partially shortening each activity listed below is possible and will give a time reduction and cost proportional to the amounts when fully shortened. How can InterCat meet the new deadline set by Janet and Gilbert at minimum cost?

d. Janet and Gilbert learn that the investment bankers are two-timing scoundrels! They are also serving as lead underwriters for the Soft Sales new issue! To keep the deal with InterCat, the bankers agree to let Janet and Gilbert in on a little secret. Soft Sales has been forced to delay its public issue because the companys records are disorganized and incomplete. Given this new information, Janet and Gilbert decide that they can be more lenient on the initial public offering timeframe. They want to complete the process of issuing new stock within 24 weeks instead of 22 weeks. Assume that the cost and time to complete the appointment of the registrar and transfer agent are the same as in part c. How can InterCat meet this new deadline set by Janet and Gilbert at minimum cost?

This is what I have come up with is it correct? the part i am concerned about is the predecessor to N and O, other solutions have it as J. If that is the case why?

Time (Weeks) Cost 3 $ 8,000 1.5 4,500 2 9,000 3 12,000 5 50,000 1,000 6 25,000 3 15,000 Activity Immediate Predecessors Evaluate the prestige of each potential underwriter Select a syndicate of underwriters. Evaluate the prestige of each potential underwriter. Negotiate the commitment of each member Select a syndicate of underwriters. of the syndicate Negotiate the spread for each member of Select a syndicate of underwriters. the syndicate Prepare the registration statement, including Negotiate both the commitment and spread the proposed financing and information for each member of the syndicate. about the firm's history, existing business, and plans for the future. Submit the registration statement to the Prepare the registration statement Securities and Exchange Commission (SEC). Make presentations to institutional investors Submit the registration statement to the SEC. and develop the interest of potential buyers. Distribute the preliminary prospectus, affec. Submit the registration statement to the SEC. tionately termed the red herring Calculate the issue price. Submit the registration statement to the SEC. Receive deficiency memorandum from the SEC Submit the registration statement to the SEC. Amend the registration statement and Receive deficiency memorandum from the SEC. resubmit it to the SEC. Receive registration confirmation from the SEC Amend the registration statement and resubmit it to the SEC. Confirm that the new issue complies with Make presentations to institutional investors the "blue sky" laws of each state. and develop the interest of potential buyers Distribute the preliminary prospectus, affec- tionately termed the red herring. Calculate the issue price. Receive registration confirmation from the SEC. Appoint a registrar Receive registration confirmation from the SEC Appoint a transfer agent. Receive registration confirmation from the SEC. Issue final prospectus that includes the final Confirm that the new issue complies with offer price and any amendments to all the "blue sky laws of each state. purchasers offered securities through the mail. Appoint a registrar and transfer agent Phone interested buyers Confirm that the new issue complies with the "blue sky laws of each state. Appoint a registrar and transfer agent. "The spread is the payment in underwe receives for services 12,000 0 6,000 . 2 0 5,000 3 3.5 12,000 13,000 40,000 4.5 4 9,000 Time (Weeks) 1.5 Cost $14,000 8,000 95,000 0.5 4 4 60,000 2 22,000 Activity Evaluate the prestige of each potential underwriter. Select a syndicate of underwriters. Prepare the registration statement, including the proposed financing and information about the firm's history, existing business, and plans for the future. Make presentations to institutional investors and develop the interest of potential buyers. Distribute the preliminary prospectus, affectionately termed the red herring. Calculate the issue price. Amend the registration statement and resubmit it to the SEC Confirm that the new issue complies with the "blue sky" laws of each state. Appoint a registrar Appoint a transfer agent. Issue final prospectus that includes the final offer price and any amendments to all purchasers offered securities through the mail. Phone interested buyers. 3.5 0.5 31,000 9,000 0.5 8,300 1.5 1.5 2 19,000 21,000 99,000 1.5 20,000 Pred D Activity A B D E F G H . B B C,D E F F F F - J J K L M N o P K G,H,J,L L L M,N, MNO a Time (Weeks) Cost 3 $ 8,000 1.5 4,500 2 9,000 3 12,000 5 50,000 1,000 6 25,000 3 15,000 Activity Immediate Predecessors Evaluate the prestige of each potential underwriter Select a syndicate of underwriters. Evaluate the prestige of each potential underwriter. Negotiate the commitment of each member Select a syndicate of underwriters. of the syndicate Negotiate the spread for each member of Select a syndicate of underwriters. the syndicate Prepare the registration statement, including Negotiate both the commitment and spread the proposed financing and information for each member of the syndicate. about the firm's history, existing business, and plans for the future. Submit the registration statement to the Prepare the registration statement Securities and Exchange Commission (SEC). Make presentations to institutional investors Submit the registration statement to the SEC. and develop the interest of potential buyers. Distribute the preliminary prospectus, affec. Submit the registration statement to the SEC. tionately termed the red herring Calculate the issue price. Submit the registration statement to the SEC. Receive deficiency memorandum from the SEC Submit the registration statement to the SEC. Amend the registration statement and Receive deficiency memorandum from the SEC. resubmit it to the SEC. Receive registration confirmation from the SEC Amend the registration statement and resubmit it to the SEC. Confirm that the new issue complies with Make presentations to institutional investors the "blue sky" laws of each state. and develop the interest of potential buyers Distribute the preliminary prospectus, affec- tionately termed the red herring. Calculate the issue price. Receive registration confirmation from the SEC. Appoint a registrar Receive registration confirmation from the SEC Appoint a transfer agent. Receive registration confirmation from the SEC. Issue final prospectus that includes the final Confirm that the new issue complies with offer price and any amendments to all the "blue sky laws of each state. purchasers offered securities through the mail. Appoint a registrar and transfer agent Phone interested buyers Confirm that the new issue complies with the "blue sky laws of each state. Appoint a registrar and transfer agent. "The spread is the payment in underwe receives for services 12,000 0 6,000 . 2 0 5,000 3 3.5 12,000 13,000 40,000 4.5 4 9,000 Time (Weeks) 1.5 Cost $14,000 8,000 95,000 0.5 4 4 60,000 2 22,000 Activity Evaluate the prestige of each potential underwriter. Select a syndicate of underwriters. Prepare the registration statement, including the proposed financing and information about the firm's history, existing business, and plans for the future. Make presentations to institutional investors and develop the interest of potential buyers. Distribute the preliminary prospectus, affectionately termed the red herring. Calculate the issue price. Amend the registration statement and resubmit it to the SEC Confirm that the new issue complies with the "blue sky" laws of each state. Appoint a registrar Appoint a transfer agent. Issue final prospectus that includes the final offer price and any amendments to all purchasers offered securities through the mail. Phone interested buyers. 3.5 0.5 31,000 9,000 0.5 8,300 1.5 1.5 2 19,000 21,000 99,000 1.5 20,000 Pred D Activity A B D E F G H . B B C,D E F F F F - J J K L M N o P K G,H,J,L L L M,N, MNO a