Anthony Mitchel had advocated making diversifying acquisitions in an effort to move beyond the company$$s mature core business but doing so in a way that exploited the company$$s skills in brand management. He had explored six possible related industries, in the general field of consumer packaged goods, and determined that a promising small liquor manufacturer, Bundaberg Rum, offered unusual opportunities for real growth and, at the same time, market protection through branding. He had identified Bundaberg Rum as a well$-$established brand of liquor as the leading private Australian manufacturer of rum, located in Bundaberg, Queensland.

The proposal was expensive: $$1\mathrm{.}5$ million to buy the company and $$2\mathrm{.}5$ million to renovate the company$$s facilities completely while simultaneously expanding distribution to new geographical markets. The expected returns were high: after$-$tax cash flows were projected to be $$13\mathrm{.}4$ million, yielding an IRR of $28\mathrm{.}7$ percent. This project would be classed in the new$-$product category of proposals.