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Spring 2015
Mel B. Taciroglu

Final Paper Due: June 12, 2015, 5:00pm


As it was put in your textbook, There are many venture-capital syndicates that consist of a few (say eight
or ten) wealthy people who combine to make investments in small and (hopefully) growing business.
Typically, the investors hire a young investment manager (often an engineer with an MBA) who seeks and
analyzes investment opportunities for the group.

For this project, acting as an investment manager, you are going to evaluate a green company (preferably
a startup company or a well-established company that ventures into new markets with new ideas). In
particular, you need to focus on a certain green PRODUCT the company is producing that is replacing a
conventional product.

Examples: Electric Vehicles replacing Internal Combustion Engine Vehicles, Led lights replacing
conventional lights, Solar Panels replacing the city power to supply a residential houses energy needs,
Electric Hand Dryers replacing paper towels etc.,) The choice of the company and product is up to you.
Find something that would contribute to your career goals.

There are three parts to this project:

Microeconomics: Make a brief introduction. What type of an industry is the company
operating in? Oligopoly? Perfect Competition? Monopoly? Monopolistic Competition?
Justify your choice. How does the industry profile affect companys actions?

Project Evaluation: From a consumers point of view, consider all the cash flow that is
associated with

Option I: Using this company's green product versus;
Option II: Using an alternative conventional product (that maybe produced by the same
or a different company)

Consider the NPV that corresponds to the discounted cash flow resulting from the usage of
each product. Note that neither the cash flow nor the number of periods, the discount rate
etc. are given to you. You need to use your judgment on the specifics of your calculation and
use your best estimate with all the relevant data that you can find. You need to do some
research and make reasonable assumptions about the quantity of the product used by an
average consumer per period, number of periods, the initial cost, the ongoing costs,
such as maintenance, the benefits if they are different for the two optionsetc.
Consider all the relevant cash flow that needs to go into your calculation to make a sensible
comparison. You also need to determine the MARR (the discount rate) that would apply to
an average American consumer (see the slides for Week 8 on how to choose a discount rate,
hint: what is the cost of funds for an average American consumer?).
(Extension: Are there any aspects of using this product(s), not directly affecting the customer
but that are affecting the third parties, i.e. externalities. How would your analysis change if
you included externalities in your NPV calculations?)

Macroeconomics: How do you see the future of the green product considering the
macroeconomic trends we are experiencing? What are the relevant factors for your

particular product? For example, for electric vehicles, economic boom/slowdown, gas price
decline/increase would be relevant.)


This is a group project. You are expected to work on this project with your fellow classmates. There should
be at least 4 and at most 6 students in your group. YOUR PROJECT WILL NOT BE GRADED IF THERE ARE
LESS THAN 4 MEMBERS IN YOUR GROUP!!! The person whose last name begins with a letter closest to A
should submit the project.


All projects must be submitted in .PDF format.

Every sentence/analysis/comment should be produced by you! Anything that does not belong to you,
need to be in quotation marks. Never use other peoples work without citing it in your references. Even if
you rephrase/paraphrase the ideas that are put forward by somebody else, you need to acknowledge the
originator, by putting the source within parenthesis or in a footnote and by providing the exact source in
References that needs to be given at the last page of your report. You can use APA standard for your
references. If any part of your work is directly copied from another source, all the members of the group
will get zero points.

Your assignment should be 5 to 7 pages, including any tables or graphs you might have, excluding the
references at the end. Use font Times New Roman, size 12, single space.

Your paper will be graded on:
1. (20 points) Clarity of ideas: Make sure you follow a logical sequence without including
unnecessary data/information. Do not repeat the same information or idea in different sections
of your paper.
2. (70 points) Usage of class material and its application: The objective of this paper is to have you
think, come up with an original idea, combine the information you obtain from your research
with the ideas covered in class, and synthesize them.
3. (10 points) Organization and presentation: Organize your ideas well, coordinate with your group
members, have the same font size/type throughout your paper, and create connections across
sections for coherence.

As always, please email me or come to my office hours to clarify/brainstorm for any part of the project
description above.