the analytical errors should be corrected for the record, even if only one was fixed, the project's NPV would be positive. Not only is it a good investment, it is actually a very good investment. In a followup memo the analyst defended his original figures. It was perfectly legitimate, he argued, to separate the sequence of investments because each could be analyzed on its own merits at the appropriate time. In fact, only the initial investment of $145 million was now before the conunittee. Nevertheless, he claimed to be indifferent about whether he evaluated them separately (see Table A) or added them all together (Table B). Discounting at 15%, none of the three investments had a positive NPV and so neither did the whole program. At 10% the project currently being reviewed looked better, naturally, and the committee was free to accord it the special treatment requested. But the analyst respectfully observed that a new product launch was almost certainly riskier than the established core business. Even if 15% was too high (which he doubted) surely 10% was too low. At any hurdle rate which reflected the higher risk of a product introduction, the project was unimpressive