Cases Suggested Questions These questions are intended to help your analysis. However, your final solution to the cases and recommendations should not necessarily be limited to the answers to these questions or the assumptions in the cases. The Super Project Case Suggested Questions 1. What are the relevant cash flows for General Foods to use in evaluating the Super project? In particular, how should management deal with issues such as a) Test-market expenses? b) Overhead expenses? c) Erosion of Jell-O contribution margin? d) Allocation of charges for the use of excess agglomerator capacity? 2. How attractive is the investment as measured by various capital budgeting techniques (i.e., accounting rate of return, payback period, internal rate of return, net present value)? How useful are each of these measures of investment attractiveness? 3. How attractive is the Super project in strategic and competitive terms? What potential risks and benefits does General Foods incur by either accepting or rejecting the project? 4. Should General Foods proceed with the Super project? Why, or why not? TETRA TECH EC AND RISK MANAGEMENT Suggested Questions 1. Discuss the evolution of the risk management and compliance process at Tt EC. a) Review case Exhibit 2 and analyze the components of the process as they relate to effective risk management. b) Why do employees feel that they own the risk management and compliance process at Tt EC? c) How has this process been inculcated into the firm’s culture? d) Is there evidence of an ethical tone at the management level of Tt EC? Discuss. 2. Elaborate on risk assessment in the Task Initiation Procedure (TIP) and oversight processes. Link this discussion to Don Rogers’s feeling about Tt EC’s risk appetite. 3. Compare and contrast the lessons learned approach that Tt EC uses in its knowledge management system with the approach used by most companies today. 4. What has Tt EC done to overcome the difficulties associated with ERM implementation? 5. How has Tt EC overcome the challenges faced by project-oriented firms? Draw parallels and cite any differences with these challenges and the problems associated with strategic risk management (refer to the answer to question #4). Ergonomics, Inc. Case INFRASTRUCTURE FINANCE: THE SYDNEY CROSS CITY TUNNEL Suggested Questions What are the merits of having private-sector participation in financing of the Sydney CCT? Why is the Sydney CCT project attractive for CKI? What are the risks associated with financing, developing and operating the Sydney CCT? How could the CCM allocate and mitigate risks? Why did the Sydney CCT fail to deliver the projected returns for its investors as of 2006? Using the projected traffic volumes, financial and other data, prepare a financial model of CCM utilizing a range of economic scenarios, and comment on the insights gleaned from such models. Revise the model based on actual tunnel patronage experienced and comment on the tunnel's debt capacity when the term loan becomes due. 7. Because Australia is a mature democracy with a developed economy and stable institutions, it could be argued that CKI underestimated public sentiment in Sydney and thus its impact on the Sydney CCT patronage. What political, regulatory and other institutional risks may CKI further envisage from the Sydney CCT's negative public image? What pre-emptive corporate action should it take to mitigate such problems? 1. 2. 3. 4. 5. 6.