Texaco Aviation Transport Services (C)
5 Pages Posted: 21 Oct 2008
The C case (see also the A [G-0539] and B [G-0540] cases) presents some of the unanticipated pluses of having entered into the fractional-ownership arrangement. The real message students take away is that decisions are always made with incomplete information (i.e., Don Baldwin did not anticipate these benefits, and did not assign a cash-flow value to them). Thus, management is also about continually looking for alternatives and creative uses for existing resources. One might hypothesize that the tendency in most decision making, when contemplating a "go" versus "no-go" decision, is to identify and evaluate risks and negative "what-ifs."
Keywords: aircraft justification, capital budgeting, capital investment, outsourcing
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