The purpose of this project is to support Company in the analysis of investment priorities supporting business growth from 2023-2031. Current investment requests identified by Company exceed the $70M/year in available funding and a prioritization scheme must be developed to identify the portfolio of investments that will maximize growth. company is seeking contractor support to develop and apply an investment analysis to answer the following questions:
What investment portfolio maximizes growth for company during the period 2023-2031?
What investment portfolio(s) maximize value creation over the same period for the programs under evaluation?
TASK 1 Conduct an independent and analytically-based assessment of a range of potential IRAD investments for company and determine the optimal mix that supports company's financial objectives. company has identified a series of programs requiring IRAD investment. For each program, company will provide all necessary financial data (see company Support Section below). Utilizing these inputs, the contractor will conduct an investment analysis to support the prioritization of individual IRAD investments and identify optimal investment portfolio mixes. The analysis should support the following outputs:
Portfolio of investments that achieves the highest expected NPV for $70M of investment
Portfolio that produces the highest growth through 2031
How would the answer change if the annual investment level was raised to $90M? The analysis should be capable of supporting annual IRAD investments covering multiple years. Additionally, the analysis should take into account different Probability of Win (Pwin)/ Probability.
company will provide the following support and data
: Global Inputs Weighted Average Cost of Capital (WACC) = 8%
Total available investment by year = $70M w/ option to escalate to $90M
Investment and opportunity data = Attached Note: Pgo is the probability that the program materializes (i.e., probability that someone will win and start building the system), and Pwin is the probability that the client wins
GREAT Investment Data File - 2... \begin{tabular}{|l|l|l|l|} \hline \multicolumn{2}{|l|}{} & \\ \hline Project Name & \multicolumn{1}{|c|}{ Sub-Project } & Investment Type & \\ \hline Fighter-Recompete & & \\ \hline Project A & No Investment & Contractual & n/a \\ \hline Project A & Keep Sold Investment & Designed to increase the probability of win for this opportunity and, if won, would result in the full capture of the project's estimated revenue and EBIT streams \\ \hline \end{tabular} \begin{tabular}{|l|l|l|l|} \hline Fighter - International Opportunities & & \\ \hline Project B & No Investment & Contractual & n/a \\ \hline Project B & International Conversion & Discretionary & Designed to increase the probability of win for this opportunity and, if won, would result in the full capture of the project's estimated revenue and EBIT streams \\ \hline Project B & Increase Platform Range & Discretionary & Designed to increase the probability of win for this opportunity and, if won, would result in the full capture of the project's estimated revenue and EBIT streams \\ \hline \end{tabular} \begin{tabular}{|l|l|l|l} \hline Fighter - MISSION EQUIPMENT - International Opportunities & \\ \hline Project F & Cockpit & Discretionary & Designed to be equipped on the Fighter and create an additional source of profitability on the program, but only sells if GREAT wins the international opportunity \\ \hline Project F & Sensors & Discretionary & Designed to be equipped on the Fighter and create an additional source of profitability on the program, but only sells if GREAT wins the international opportunity \\ \hline \end{tabular} \begin{tabular}{|l|l|l|l|} \hline Super Sonic Trar sport Development & & \\ \hline Project C & No Investment & Contractual & n/a \\ \hline Project C & Aircraft Development & Discretionary & Designed to increase the probability of win for this opportunity and, if won, would result in the full capture of the project's estimated revenue and EBIT streams \\ \hline \end{tabular} \begin{tabular}{|l|l|l|l|} \hline Sustainment Deplot Process Enhancement & & \\ \hline Project D & No Investment & Contractual & n/a \\ \hline Project D & Cost Reductions & Discretionary & Designed to increase the probability of win for this opportunity but, if won, would result in the project's estimated revenue and EBIT streams being somewhat decremented \\ \hline \end{tabular} \begin{tabular}{|l|l|l|l} \hline Light Aircraft Upgrade & & \\ \hline Project G & No Investment & Contractual & n/a \\ \hline Project G & Udate Obsolete Technology & Discretionary & Designed to increase the probability of go and win for this opportunity and, if won, would result in the full capture of the project's estimated revenue and EBIT streams \\ \hline \end{tabular} GREAT Investment Data File - 2.. GREAT Investment Data File - 2... Done GREAT Investment Data File - 2... \begin{tabular}{|l|l|l|l|} \hline \multicolumn{2}{|l|}{} & \\ \hline Project Name & \multicolumn{1}{|c|}{ Sub-Project } & Investment Type & \\ \hline Fighter-Recompete & & \\ \hline Project A & No Investment & Contractual & n/a \\ \hline Project A & Keep Sold Investment & Designed to increase the probability of win for this opportunity and, if won, would result in the full capture of the project's estimated revenue and EBIT streams \\ \hline \end{tabular} \begin{tabular}{|l|l|l|l|} \hline Fighter - International Opportunities & & \\ \hline Project B & No Investment & Contractual & n/a \\ \hline Project B & International Conversion & Discretionary & Designed to increase the probability of win for this opportunity and, if won, would result in the full capture of the project's estimated revenue and EBIT streams \\ \hline Project B & Increase Platform Range & Discretionary & Designed to increase the probability of win for this opportunity and, if won, would result in the full capture of the project's estimated revenue and EBIT streams \\ \hline \end{tabular} \begin{tabular}{|l|l|l|l} \hline Fighter - MISSION EQUIPMENT - International Opportunities & \\ \hline Project F & Cockpit & Discretionary & Designed to be equipped on the Fighter and create an additional source of profitability on the program, but only sells if GREAT wins the international opportunity \\ \hline Project F & Sensors & Discretionary & Designed to be equipped on the Fighter and create an additional source of profitability on the program, but only sells if GREAT wins the international opportunity \\ \hline \end{tabular} \begin{tabular}{|l|l|l|l|} \hline Super Sonic Trar sport Development & & \\ \hline Project C & No Investment & Contractual & n/a \\ \hline Project C & Aircraft Development & Discretionary & Designed to increase the probability of win for this opportunity and, if won, would result in the full capture of the project's estimated revenue and EBIT streams \\ \hline \end{tabular} \begin{tabular}{|l|l|l|l|} \hline Sustainment Deplot Process Enhancement & & \\ \hline Project D & No Investment & Contractual & n/a \\ \hline Project D & Cost Reductions & Discretionary & Designed to increase the probability of win for this opportunity but, if won, would result in the project's estimated revenue and EBIT streams being somewhat decremented \\ \hline \end{tabular} \begin{tabular}{|l|l|l|l} \hline Light Aircraft Upgrade & & \\ \hline Project G & No Investment & Contractual & n/a \\ \hline Project G & Udate Obsolete Technology & Discretionary & Designed to increase the probability of go and win for this opportunity and, if won, would result in the full capture of the project's estimated revenue and EBIT streams \\ \hline \end{tabular} GREAT Investment Data File - 2.. GREAT Investment Data File - 2... Done
