Part II:Â Read the following three sample business plans:
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"_blank" Ice Dreams
Real_Estate_Brokerage_Business_Plan/executive_summary.cfm" t "_blank"
R J Wagner & Associates Realty
HYPERLINK "http://www.bplans.com/spv/3136/index.cfm?affiliate=sbm" t
"_blank" Interstate Travel Center
Which of these three projects do you think should have the highest risk
from the point of view of investors (potential providers of funds) and
would therefore be evaluated using the highest discount rate?Â Which
one do you think should have the lowest?Â Write a two page paper
explaining your reasoning.
In your assessment of the business plans consider the possible risk of
each plan.Â Risk is one of the main considerations when deciding whether
a plan should be evaluated and discounted to present value using a high
or a low discount rate.
Note: you are not expected to fully analyse the numbers and financial
statements in these business plans.Â There are only forecasts and
projections. Nobody really believes them anyway.Â Use your intuition
rather than calculations to assess risk and potential of each of these
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