Activity 2.7

Group Case Study: Starting Right Corporation

Bill B. Cohen

Cory Klein

Joshua Jackson

Embry-Riddle
Aeronautical University

MGMT 524 Management
Science

October 30, 2014

STARTING RIGHT CORPORATION

Q1. Sue Pansky, a retired elementary school teacher, is considering investing in Starting Right. She is very conservative and is a risk avoider. What do you recommend?

Q2. Ray Cahn, who is currently a commodities broker, is also considering an investment, although he believes that there is only an 11% chance of success. What do you recommend?

Q3. Lila Battle has decided to invest in Starting Right. While she believes that Julia has a good chance of being successful, Lila is a risk avoider and very conservative. What is your advice to Lila?

Q4. George Yates believes that there is an equally likely chance for success. What is your recommendation?

Q5. Peter Metarko is extremely optimistic about the market for the new baby food. What is your advice for Pete?

Q6. Julia Day has been told that developing the legal documents for each fundraising alternative is expensive. Julia would like to offer alternatives for both risk-averse and risk-seeking investors. Can Julia delete one of the financial alternatives and still offer choices for risk seekers and risk avoiders?