The company is the film division for a large entertainment multinational corporation. The main office is located in Burbank, California. In addition to the feature-film division, the conglomerate includes theme parks; video productions; a television channel; a new subscription- based, on-demand streaming movie and entertainment network; interactive electronic games (for most platforms); and theatrical productions. The company has been enjoying steady growth for most of the past 75 years and is even acquiring some competitors to expand and enhance its own on-demand network. In recent years (even during and just as we were emerging from the worst of the COVID Pandemic), total revenues increased by 15 percent to $23.87 billion. The company is engaged in negotiations to expand its theme-park empire further in mainland China and into Poland. The film division generated $637 million in revenues, which was an increase of 8.1 percent over the previous year. However, profit margins were down 3 percent to 12 percent because of the poor response three of the five major film releases for the year. While general results appear to be strong, the recent impact of and recovery from the Pandemic on revenues is currently unclear for long-term profitability. COMPANY MISSION The Mission for the firm is: Our overriding objective is to create shareholder value by continuing to be the world's premier entertainment company from a creative, strategic, and financial standpoint. The film division supports this mission by producing four-to-six high-quality, family-oriented entertainment films (e.g., "G," "PG," and even some "PG-13") for mass distribution each year. (Other ratings include "R," and "NC-17," "X, as well as "Unrated"). In recent years, the CEO of the company has advocated that the firm take a leadership position in championing environmental concerns. Company "Must Objectives Every project selected for development and production must meet the "Must" objectives as determined by executive management. It is important that selected film projects not violate these high-strategic-priority objectives (both to satisfy investors and stakeholders and to live up to the company's long-existing mission and creative goals). The three "Must" objectives are: 1. A film project must meet current legal, safety, and environmental standards. 2. A film project should receive a "G, PG, or a PG-13" parental advisory rating. 3. A film project should not have an adverse effect on current or planned operations within the larger company. Company "Want" Objectives are doignon might for more importance. Top management to responsible for formulating, ranking, and weighting objectives to ensure that projects support the company's strategy and mission. The "Want" objectives are: 1. The film be nominated for and (hopefully) win an Academy Award for Best Picture of the Year or Best Animated Feature. 2. Raise public consciousness about environmental issues and concerns, including climate change. 3. Generate profit in excess of 18 percent. 4. Generate additional merchandise revenue (thru action figures, replica toys, dolls, interactive video games, music (including CDs and vinyl), etc.). 5. Advance the state-of-the-art techniques in film animation and preserve the firms' long- term reputation for quality craftsmanship. 6. Provide the basis for the development of a new ride, or even a new themed zone, at a company-owned theme park (or parks). ASSIGNMENT You are a member of the Film Priority Assessment Team in charge of evaluating and selecting film proposals. Use the provided information to formally evaluate and rank each proposal. Be prepared to report your rankings and justify your decisions. Assume that all of the projects have passed the estimated minimum hurdle rate of 14 percent ROI (although note that there is still a chance that projected ROI will not meet that threshold). In addition to the brief synopsis, the proposals include the following financial projection thresholds of in-theater, on-line streaming, and video sales: 80 percent chance of ROI, 50 percent chance of ROI, and 20 percent chance of ROI. (These financial projections are derived from normal financial tools and analysis commonly used in the entertainment and other industries.) For example, using the following data; for a sample project proposal there is an 80 percent chance that it will earn at least 8 percent return on investment (ROI), a 50/50 chance the ROI will be 19 percent, and a 20 percent chance that the ROI will be 24 percent. (Using these values, full analysis suggests a 20.7% overall ROI.) (Note that this is similar, but not identical, to Project Proposal #1 below.) FILM PROPOSALS Film Project Proposal #1 - The Secret Garden This is a revision of the story about Mary, a spoiled, orphaned child of wealthy parents, who learns about a secret hidden garden at the home of her uncle, her new guardian. The big- budget film will feature performances and appearances of top-name stars who help tell the story of Mary and an unexpected friend as they look for, find, and explore the many secrets and surprises concealed in the secret garden. Probability ROI 80% 2% 50% 20% 20% 30% Film Project Proposal #2 - The Years of Roar This project is a relatively low-budget film that is proposed to use a documentary reg style that celebrates the career of one of the most influential bands in early modern rock-and-roll and music history. The film will be directed by new-wave director Faith Zacnerzy and will combine concert footage and behind-the-scenes interviews spanning the 30+-year history of the band "Roar." In addition to great music, the film will focus on the death of one of the founding members from a fentanyl overdose and reveal the underworld of constant travel, sex, lies, and drugs in the music industry. Probability ROI 80% 50% 20% 12% 14% 18% Film Project Proposal #3 - A Hole in Rondonia Ablio is a young jaguar in the Amazon rainforest. He and other rainforest animals tell the story of the life, lifestyle, and death of the "Man of the Hole," the last remaining member of an indigenous uncontacted tribe in the Brazilian state of Rondonia. Although attempts had been made to contact him, he had resisted interaction with others for decades often by digging deep holes for hiding and for trapping animals. The other members of his tribe had been wiped out by cattle ranchers and land grabbers. An animated feature has been proposed. Probability ROI 80% 15% 50% 20% 20% 24% Film Project Proposal #4 - Kraken A kraken is a legendary sea monster of enormous size said to exist off the coasts of Norway. This is the story of a kraken-like creature that was captured, displayed, and trained to perform after it injuries were treated. The big-budget film will integrate actual footage of large and unusual sea creatures with state-of-the-art computer imagery and sound effects of the kraken, its life and sometimes harsh conditions in captivity, its release back into the wild, and the debates on the wisdom of (and lawsuits about) releasing a dangerous creature back into the open sea. Probability ROI 80% 6% 50% 20% 18% 25% Film Project Proposal #5 - My Life with Dalai Lama This project is an animated, biographical account of the Dalai Lama's childhood in Tibet. The Dalai Lama is the leader of Tibetan Buddhism; he has been Dalai Lama since age 15. He has been under threat of arrest by several countries for most of his life. He won the Nobel peace prize in 1989. This story is based on the popular children's book Tales from Nepal. The Lama's life is told through the eyes of "Gouda," a field snake, and other local animals who befriend the Dalai Lama when he is a child and teenager and help him understand the principles of Buddhism, helping to set him on the path for his life's mission. Probability ROI 80% 3% 50% 20% 17% 24% Film Project Proposal #6 - Flintlock A flintlock is a term for any type of firearm that uses a flint-striking mechanism to rapidly ignite the gunpowder. This moderate-budget movie is based on the true story of the water crisis in Flint, Michigan, after an ill-considered, cost-saving decision. Told from the perspective of a detective, it presents how Flint burst into the news through high school and college students working to fight the existing, reluctant government bureaucracy and force those in charge to face emerging evidence of systemic, environmental injustice and poor decision making. Probability ROI 80% 50% 20% 9% 15% 20% Film Project Proposal #7 - Simone! This project is the story of Simone Biles, the famous U.S. gymnast who dominated international gymnastics with multiple World Championships and Olympic medals from 2013-2021. The low-budget film will document her life as a small child and how she worked to become an elite gymnast. The film will highlight how Simone maintained her motivation and health for so many years and how she dealt with the mental pressures of high-level, international competition, inappropriate treatment by a team physician, and the delay of the 2020 Summer Olympics. Probability ROI 80% 50% 20% 8% 15% 20%