Q Capstone Assignment 8 – Decision Making Case 1 You are currently working as a manager at Silver Service. You feel that you are treated well there as an employee and you are well respected by both your supervisors and employees. You have been there now for five years. Business at the shop is very steady because the shop has a very solid reputation, and is expected to stay strong through the coming years. Although there is no reason why you need to consider a change, you have always wondered what it would be like to own your own. You recently heard about a shop about three miles away that is up for sale. It is in the same community and is very similar in many ways to the shop that you currently work in. You wonder if this might be the chance of a lifetime. You Decide 1. What factors would you take into account to make this decision? 2. Based on what you know what are some things you would do to make this decision? Case 2 You do some thinking and calculate the benefits of your current position and the potential income if you open the shop. You know that your total earnings for the past three years (salary plus benefits) have averaged $100,000 per year and have remained steady. You have done your homework about the costs and benefits of being a shop owner and have found out that the shop where you are currently employed has earned $150,000 each of the past three years. Further you have found out that the shop that is up for sale, although not as successful as Silver Service, has had a net profit of $90,000 per year over the past three years. After speaking with a financial advisor and a banker, you know that in order to open the shop you’ll have to take out a $100,000 business loan to get the new company settled. You Decide 1. What would your ROI be over five years by taking this opportunity based on the information that we currently have in dollars? 2. What is the ROI percentage? 3. Based on this information what would you do? Why? (Show calculation work to justify answer) Case 3 Your decision to start his own shop has been further complicated. A good customer who considers you as his mechanic has heard through the grapevine that you are considering leaving Silver Service to start your own shop. He has offered to put up all of the funds to back your new shop as a silent partner in return for a third of the net profits of the new venture. You Decide You have decided you want to make your move now. You are trying to decide whether to: (1) go out 100 percent on your own (2) choose the silent partner or (3) continue working at the current employer. Using Microsoft Word build three Ben Franklin decision models listing all of the pros and cons of the three choices you have. 2. Which of the options would you decide to go with? 3. Why? Case 4 You are trying to decide whether or not you should leave your job at Silver Service and open your own shop. You are thirty-five years old and in good health. You have a wife/husband and three small children (ages 1, 3, and 8). You and your family just moved a year ago into a larger home in the suburbs that fits your growing family. You and your wife have decided that it is best for her to stay at home to raise the children, or your husband has lost his job and will be staying home. You have a mortgage on your home ($150,000). Although your finances are tight you have been able to make ends meet based on your current income. You Decide 1. What risk do you need to consider if you decide to follow your dream and take this opportunity to open your own shop? 2. What are the possible rewards? What will you do?