Working Computers, Inc

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WORKING COMPUTERS, INC. Case 12 12/08/2009 Team 7 Bernoulli Devices, A Division of Working Computers, Inc. Working Computers is a technological company that had been in business for almost thirty years. Within its thirty years of existence, however, they built and distributed a unique line of desktop computers, laptop computers, an operating system which was preferred by media professionals around the world, and personal data appliance (PDA). Jennifer Sobieski, an analyst in the headquarters of Working Computers, has to evaluate her division to determine the best course of action. Working Computers needs to make a capital budgeting decisions regarding their Bernoulli division. The choices are: 1) invest $18 million and keep division; 2) invest $18 million and sell the division 3) Make no investment and keep the division; or 4) Make no investment and sell the division. Bernoulli Device (PDA), which makes small computer devises, faces losing market share and increasing competition. Their PDA can only be uploaded and download from a Working-brand computer. Also, their competitors are developing software outside the US, which is lowering the competition’s cost. Major software developers are developing competing platforms at the expense of the Bernoulli, which in turn is hazardous to Working’s market share. Another problem for the company is their PDA is “behind the times” and a “drain on the rest of the corporation.” According to Ms. Sobiesk, Bernoulli lab will need $18 million of upgrades to compete and regain market share. However, Stewart Workman, CEO of Working Computers, believes the funds would be better if used to rebuild market share in computer sales. Data Analysis Looking at the cash flow of the division (with and without the investment): A capital

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