Question: Franck Ribery is considering two business ventures. Creating a new salad dressing named Ranck pronounced Ronck which is a ranch based dressing with added French

Franck Ribery is considering two business ventures.

Creating a new salad dressing named Ranck pronounced "Ronck" which is a ranch based dressing with added French flavors. He plans to patten the mixture and market the product only in the United States and Canada.

Start a new restaurant chain named Rib-eye Ry (pronounced Rib eye Ree). The restaurant would focus on Steak, Ribs, and French food with a fine dining feel. The chain would start in New York, New Jersey, Pennsylvania, Florida, and California. After a period of a few years the plan would be to expand outside of those states and allow franchisees to purchase new restaurants.

1. Using the Capital Rationing Decision Process format as your guide, discuss hypothetically how you (as a decision maker) would go about deciding which of the two new business ventures to choose.

2. What would you forecast to be the potential investment, earnings, and investment return of each venture?

3. What do you think the outcome of selecting each of these investments and which investment would you advise Mr. Ribery to choose?

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