Question
Your favorite brother has a reasonably successful business and he's considering making a big investment that he claims could take it to the next level.
Your favorite brother has a reasonably successful business and he's considering making a big investment that he claims could "take it to the next level." Surprisingly, he doesn't want your money (he plans to get a business loan from a bank) but he would like your advice.
You review his financial projections for the investment (costs, revenues, etc.) and see that the projections do forecast a positive NPV. Nothing in his projections strikes you as totally absurd, so is that it - he should just go for it? Give some advice (answer some or all of the following questions).
What additional questions do you want to ask him? What sort of additional analysis would you recommend? Explain how he should do the analysis you recommend. What (if any) other strategic considerations should he try to evaluate for this decision?
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