Valhalla_Final - 1 Should Art Marks vote to make an...

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1. Should Art Marks vote to make an investment in Telco Exchange? What valuation do you think is appropriate? The software solves a real market pain for many corporations that are able to save amounts well above the cost of the software. Based on the assumption of an initial outlay of $500,000 for software license plus the $50,000 maintenance and the savings of $3.3MM on the higher end will result in a ROI of 6:1 in the first year were quoted. Also, TX’s ETM software is the most comprehensive and highly integrated solution on the market. Also, Valhalla has a proven track record and a set of blue-chip customers . Telco has been in existence for 14 years. The software has been in use until now resulting in reduced technology risk. Reputation and word-of-mouth could create additional business at low sales and marketing costs. A significant revenue upside is company’s ability to exceed the $500,000 one-time price tag, especially given the very high and immediate ROI estimates (i.e., through capturing some of the customer surplus through price and through charging larger corporations more than base). A very
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This note was uploaded on 04/13/2010 for the course BUFN 758 taught by Professor Jacob during the Spring '10 term at University of Maryland Baltimore.

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Valhalla_Final - 1 Should Art Marks vote to make an...

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