Risk and Return
Which company of the following pairs below would you expect to be more exposed to macro risks? Pick one pair (Pair A or Pair B) and discuss. For example, if you chose Pair A, do you think it is the luxury Montreal restaurant or the established Burger Queen franchise that would be more exposed to macro risks? Discuss why.
Pair A. A luxury Montreal restaurant or an established Burger Queen franchise?
Pair B. A paint company that sells through small paint and hardware stores to do-it-yourselfers, or a paint company that sells in large volumes to Ford, GM, and Honda?
Project Analysis and What ifs?
Do you agree that what-if analysis is crucial to capital budgeting. Elaborate on this statement and explain why you agree or disagree. Support your discussion providing one or two examples of how sensitivity or scenario analysis could be used by a business given the COVID-19 global pandemic.