Jim was excited as he drove into the car park at Floating Investments Limited. The senior management meeting was scheduled for 9 AM and his proposal was the major item on the agenda. Jim's o?cial title was Projects Manager and he was responsible for initiating and overseeing new projects. This particular project was close to Jim's heart because it involved sailing-an activity that Jim had spent many years pursuing both socially and competitively. Jim believed that his project was well suited to Floating Investments as it was an extension of existing business.

Floating Investments Limited specializes in marine investment projects. Projects previously undertaken by the company include construction of canals and moorings for a major residential development and redevelopment of ‘Fisherman's Wharf' in the downtown area. Given the nature of these projects, including the length of time over which the initial investments were recovered, the degree of risk involved was generally higher than more traditional investment projects.

Although Jim had completed a business degree at University, he was determined that his accounting background would not overshadow his career choice as an operational manager. Last night he had told his wife: "This project sells itself. The idea is good. I know the sailing world and we've got the big picture sorted out. Newland Harbor has only one marina to serve over 6000 boats, 80% of which cannot get marina berths and use moorings that sailors must row to. We've already got the site and the contractor lined up to build a new marina. All we need is management's go ahead. The accountants can sort out the dollars and cents later."

The Chief Executive O?cer (CEO) opened the meeting and after the preliminaries gave Jim the signal to present his proposal. Jim knew the CEO was an experienced yachtsman and was con?dent that he would support the project. He started his proposal by describing the current shortage of marina berths and the size of the market, emphasizing that the local Port Authority owned the only existing marina. Because the Authority charged only a minimal rental, anyone who possessed a berth generally kept it and there was an elaborate (and lucrative) black market in trading the license to those on the waiting list.

Jim continued, "The proposed marina is designed for 500 boats and we estimate that it will take two years to build commencing 1 November 2001. Because of the shortage of marina berths it is expected that all berths will be leased from 1 November 2003. The 50-acre site we intend using for the project was purchased several years ago for $268,000 as part of the Fisherman's Wharf development, although it was never used for that project.

Construction of the marina falls into three stages:

1. Construction of sea walls, dredging the seabed, excavations for marina o?ces and service facilities, and road access.

2. Inserting piles and assembling pontoons.

3. Constructing buildings and facilities such as marina o?ce, chandlery, repair workshops, and waste disposal.