EECO 5103 S21 movie pseudo case

EECO 5103 S21 movie pseudo case

EECO 5103 S21 movie pseudo case

From the case study on the production of Titanic 2 film, the best option is to give James Cameron the additional $400 million to finish the film’s production.  It is clear that Cameron has already spent $500 on the film production; this implies that canceling the production at this time will amount to a loss of $500. On the other hand, giving Cameron an additional $400 to continue with the film’s production and an additional $300 in distribution and marketing means that the production’s total cost is $500+$400+$300 = $1200.  With a project sales revenue of $950, this film’s production stands to cause a loss of $250.

From the initial investment perspective, if the investor had not committed to the investment, it would not be advisable to invest in this business. Return on investment(ROI) ROI can be calculated as follows:

ROI = (Gain from the investment – the cost of investment) / (cost of investment) * 100.  ROI = (950-1200/1200) *100 = -20.83%

This means that the investment will lead to approximately -21% loss.  However, considering that the investor has already invested in the project, the goal should be to reduce the amount of loss incurred. Canceling the production as of now, the projected loss will be $500. Financing the remaining phase with $400 in production and $300 in distribution will reduce this loss to $250.  This implies that making this decision will reduce the loss incurred by $500-$250 = $250.

Moreover, contrary to the prediction associated with the distribution and marketing cost, it is anticipated that in the current age of digital medium and the OTT platforms coupled with the existing visual distribution medium, and satellite rights, there is a change in the structure of revenue generation and investing in the film is no longer a gamble. Revenue streams are getting organized. This implies that the projected sales revenue is not a gamble and will fulfill the projected returns.

Task 3 Assignment: Company Leadership (Portfolio Assignment)

EECO 5103 S21 movie pseudo case