Management and the Technology Professional – B302

Case study answer 3

From the NPV (net present value) result and the decision tree analysis overall it is believed that the most sensible course of action would be to start the client project regardless of the potential Microsoft acquisition result.

The reason for this is that as shown in the NPV, regardless of the outcome - a significant profit will still be made. This shows us that from a financial viewpoint, there is lower overall risk from starting the project rather than cancelling it. Decision tree analysis also shows that cancelling the project only gives outcomes which can be considered as negative, with the best results coming from the decision to start the project and succeeding in its’ undertaking.

Overall it is believed that decisions should not be made based upon what may or may not happen with a merger. Instead, companies should make their decisions on the basis that they will be in the same position for the rest of the financial year and so seek the profits they can get wherever possible.