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You are the head of the project selection team at Broken Arrow Records. Your team is considering two different recording projects. Based on past history, Broken Arrow expects at least a rate of return of 20 percent. Given the follwoing information for each project, which one should be Broken Arrow's first priority? Should Broken Arrow fund any of the other projects? If so, what should be the order of priority based on return on investment

You are the head of the project selection team at Broken Arrow Records. Your team is considering two different recording projects. Based on past history, Broken Arrow expects at least a rate of return of 20 percent. Given the follwoing information for each project, which one should be Broken Arrow's first priority? Should Broken Arrow fund any of the other projects? If so, what should be the order of priority based on return on investment

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
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You are the head of the project selection team at Broken Arrow Records. Your team is considering two different recording projects. Based on past history, Broken Arrow expects at least a rate of return of 20 percent. Given the follwoing information for each project, which one should be Broken Arrow's first priority? Should Broken Arrow fund any of the other projects? If so, what should be the order of priority based on return on investment? 

### Project Selection Analysis at Broken Arrow Records #### Overview As the head of the project selection team at Broken Arrow Records, you are tasked with evaluating three potential recording projects. Each project requires an initial investment, and their financial returns unfold over a period of five years. Given Broken Arrow's expectation of at least a 20% return rate, the decision involves identifying the project with the highest priority based on return on investment (ROI). #### Projects Analyzed 1. **Recording Project: Time Fades Away** - **Investment and Revenue Stream:** - **Year 0:** Investment: $600,000 | Revenue: $0 - **Year 1:** Revenue: $600,000 - **Year 2:** Revenue: $75,000 - **Year 3:** Revenue: $20,000 - **Year 4:** Revenue: $15,000 - **Year 5:** Revenue: $10,000 2. **Recording Project: On the Beach** - **Investment and Revenue Stream:** - **Year 0:** Investment: $400,000 | Revenue: $0 - **Year 1:** Revenue: $400,000 - **Year 2:** Revenue: $100,000 - **Year 3:** Revenue: $25,000 - **Year 4:** Revenue: $20,000 - **Year 5:** Revenue: $10,000 3. **Recording Project: Tonight’s the Night** - **Investment and Revenue Stream:** - **Year 0:** Investment: $200,000 | Revenue: $0 - **Year 1:** Revenue: $200,000 - **Year 2:** Revenue: $125,000 - **Year 3:** Revenue: $75,000 - **Year 4:** Revenue: $20,000 - **Year 5:** Revenue: $10,000 #### Analysis Considerations - **Objective:** Determine which project should be prioritized based on the expected ROI of at least 20%. Calculate total revenues, returns, and assess each project's viability over the five-year span. - **Outcomes Needed:** Identify if multiple projects should be pursued and rank them according to their potential financial returns. By evaluating the financial figures and anticipated returns, Broken Arrow Records can strategically decide
Transcribed Image Text:### Project Selection Analysis at Broken Arrow Records #### Overview As the head of the project selection team at Broken Arrow Records, you are tasked with evaluating three potential recording projects. Each project requires an initial investment, and their financial returns unfold over a period of five years. Given Broken Arrow's expectation of at least a 20% return rate, the decision involves identifying the project with the highest priority based on return on investment (ROI). #### Projects Analyzed 1. **Recording Project: Time Fades Away** - **Investment and Revenue Stream:** - **Year 0:** Investment: $600,000 | Revenue: $0 - **Year 1:** Revenue: $600,000 - **Year 2:** Revenue: $75,000 - **Year 3:** Revenue: $20,000 - **Year 4:** Revenue: $15,000 - **Year 5:** Revenue: $10,000 2. **Recording Project: On the Beach** - **Investment and Revenue Stream:** - **Year 0:** Investment: $400,000 | Revenue: $0 - **Year 1:** Revenue: $400,000 - **Year 2:** Revenue: $100,000 - **Year 3:** Revenue: $25,000 - **Year 4:** Revenue: $20,000 - **Year 5:** Revenue: $10,000 3. **Recording Project: Tonight’s the Night** - **Investment and Revenue Stream:** - **Year 0:** Investment: $200,000 | Revenue: $0 - **Year 1:** Revenue: $200,000 - **Year 2:** Revenue: $125,000 - **Year 3:** Revenue: $75,000 - **Year 4:** Revenue: $20,000 - **Year 5:** Revenue: $10,000 #### Analysis Considerations - **Objective:** Determine which project should be prioritized based on the expected ROI of at least 20%. Calculate total revenues, returns, and assess each project's viability over the five-year span. - **Outcomes Needed:** Identify if multiple projects should be pursued and rank them according to their potential financial returns. By evaluating the financial figures and anticipated returns, Broken Arrow Records can strategically decide
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