This Case is about Finance, International, Entrepreneurship

Publication Date: 05/25/2016

On January 31, 2006, a consortium headed by GMR Group (GMR) was chosen as the only technically competent bidder. The pride of the National Capital Region, the Delhi airport, would function as an entrance for other guests, dignitaries, and participants arriving for the forthcoming Commonwealth Games to be held in New Delhi in October 2010. On the other hand, the Mumbai airport was the entrance to company investments in India. Which airport would give an advantage in the international air travel sector to GMR? Learning Objective: The case addresses tactical flexibility empowers entrepreneurs to assess choices concerning investment in important projects requiring utilities, where the pricing is controlled.

The case is meant to highlight the following learning objectives:

Comprehension of the intricacies of capital investment in the context of an industry defined by significant investment, long gestation, a limited time horizon, and a sales model that is regulated:

Building on essential knowledge in project evaluation techniques, including net present value, internal rate of return (IRR), and altered IRR, and assessing feasibility at the bid period;

Understanding the nature of managerial flexibilities accessible long gestation jobs; and

Presenting the use of simulation as a means embedded in a job through an illustrative example.

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