To illustrate silo approach and potential advantage of global view, consider the following example where the chief executive officer have to decide if the company has to develop in one BU or both. WACC for company is 10%, each BU requires 100 capital expenditures and will be run on a 5-years period at the end of which invested capital will be recovered.

The following tables present possible outcomes depending on economic, geographic, climatic, social, technological and political conditions. These predictions have been made by consultants hired separately by business units managers.

	Scenario 1	Scenario 2	Scenario 3	Scenario 4
Probability/each year	10%	30%	20%	40%
BU 1 outcome	-20	0	20	30

	Scenario 1	Scenario 2	Scenario 3	Scenario 4
Probability/each year	40%	20%	10%	30%
BU 2 outcome	-20	-10	30	60

1. Based on previous datas, whats the rational decision?
2. Suppose now that conditions are not independant. The chief Executive Officer made his own estimations and as can be easily predicted due to similarities in frequency of occurrence, found that CF are negatively correlated. Would the decision be the same?