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Compact case
Case
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Reference no. UVA-QA-0470
Published by: Darden Business Publishing
Published in: 1994
Length: 2 pages
Data source: Field research

Abstract

An electric utility faces the hard choice between losing their third largest customer or building a cogeneration plant that is very risky to them and appears to take value away from the firm. Students first assess their strategic position and the magnitude of the risk, in the process improving the assumptions of the discounted cash flow spreadsheet model available to them. The task is then to be shrewd and creative in reducing and managing the risk of the project, which, after all, is manageable. This supplement provides information on the various factors that contribute to the risk of the project.
Location:
Industry:
Size:
USD1.5 billion

About

Abstract

An electric utility faces the hard choice between losing their third largest customer or building a cogeneration plant that is very risky to them and appears to take value away from the firm. Students first assess their strategic position and the magnitude of the risk, in the process improving the assumptions of the discounted cash flow spreadsheet model available to them. The task is then to be shrewd and creative in reducing and managing the risk of the project, which, after all, is manageable. This supplement provides information on the various factors that contribute to the risk of the project.

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Location:
Industry:
Size:
USD1.5 billion

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