Explain why it is possible for your brother to make a good decision even though he cannot know for sure how well his alternatives would work out.

Capital budgeting methods, sensitivity analysis, spreadsheet development,
uncertainties Your brother, Jackson, was laid off from his job with a large and
famous software company. He would like to sell his stock in the company and use the
proceeds to start a restaurant. The stock is currently valued at $500,000. He received
a job offer from a competitor that will pay $90,000 per year plus benefits. He asked
you to help him decide the best course of action.

REQUIRED:

A. What are the alternatives that Jackson faces?
B. Choose the most appropriate analysis technique and explain your choice.

C. If your brother chooses to open a restaurant, what are his opportunity
costs?
D. List the steps you would take to develop a spreadsheet that your brother
could manipulate to help with the quantitative aspects of this decision. Assume
that you only have time to set up a template and that your brother will fill in
the specific information. However, you need to tell him the general categories
of information he will need to gather.
E. List uncertainties about whether taking the job offer would turn out well
for your brother. List as many uncertainties as you can.
F. List uncertainties about whether opening a restaurant would turn out
well for your brother. List as many uncertainties as you can.
G. Explain why it is possible for your brother to make a good decision even
though he cannot know for sure how well his alternatives would work out.