read the second part of the exercise (attached) and answer the following questions.

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Business Finance

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Based on the part one answer, answer the following questions.

  1. What was your choice? Explain the rationale. (5 points)
  2. How are you going to implement the plan? Please try to be specific and detailed. (5 points)

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THE ALASKAN GOLD MINE PART I You have taken a three-month option on a possible gold mine in Alaska. It took you two months of dangerous journey to get there. In two weeks of exploration (and recuperation) you have regained your health, except for your injured left hand, which sometimes can become suddenly quite weak. In the last 24 hours, you have finally discovered gold in what appears to be good quantity. You have exactly two weeks to get to the claims office. If you arrive late, and attempt to secure the property (with the owners knowing you have visited it), there will probably be an auction at which you could be easily out-bid, given your limited resources. Here are your alternatives: 1. Wait 3-4 weeks until the weather warms up and enjoy a safe trip home. 2. Go over the mountains. This is dangerous. It is sometimes impassable. It is quick, if you can make it without harm: 7-10 days. If you encounter storms or injury, you will probably have to turn back or perish, as the longest part of the journey is on the way over the top. 3. Go through the valley passes. This is less dangerous and is usually passable. It is slow and tiring. You can probably make it in 2 to 3 weeks. The weather is only moderately favorable, with what may be a mountain storm brewing. You will know if it is a storm within 48 hours, and whether the mountain is passable (if the storm comes) about one day later. 4. Wait 2-3 days, take #2 weather permitting; if not, take #3. (There is no advantage to waiting if you prefer #3 anyway, and waiting to take #1 = #1.) What do you do? (Circle your answer) #1 #2 #3 #4 Authored and copyrighted by Jeffrey Barach, Graduate School of Business, Tulane, University, New Orleans, LA. 1977. THE ALASKAN GOLD MINE PART II Assume you chose the valley passes (#3). Five days later you are halfway there. You have pushed too hard and sprained your ankle. Pat, an old friend on a trapping expedition comes along and takes you to a cabin. Pat could get to the claims office town, and offers to take you. Travelling together, it might take 10 to 14 more days to get there. If you tell Pat and make a deal, Pat alone could get there in about 8 to 9 days. If you were well, you could do it easily in 7 days, but you presently cannot make it without a few days rest and then 10 days to 2 weeks of travel. You are not sure whether Pat can exercise the option and file the claim correctly, because Pat is not too bright, tends to drink to excess, and is not the single-minded hustler that you are. Pat is a simple, decent old friend who likes trapping, but would, you suspect, both need and desire financial independence. You think you can trust Pat if you offer to split 50:50, since your expertise and help would be needed to capitalize on the discovery. What is your decision? Go with Pat _______ Go it alone _______ Send Pat _______ Explain and detail your best strategy for success and how you plan to do it? __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ __________________________________________________________________ Authored and copyrighted by Jeffrey Barach, Graduate School of Business, Tulane, University, New Orleans, LA. 1977. 1. What was your choice? Explain the rationale of your choice. (5 points) I chose the third alternative. This choice involves taking the moderately safer route back to the claims office through the valley passes. In light of my health and the ailing left arm, taking the second alternative and going over the hills is extremely dangerous. I might not even make it to the top of the mountain storm catches up with me. It would not be in my company’s best interests to risk my life in pursuit of the newly found treasure. An individual is regarded as the representation of his company to the outside world and therefore, I would not take the first alternative of deliberately turning my back on all the efforts done to get to the mines and going straight home. The fourth alternative involves speculation, waiting for a day or two so as to choose whether the mountains are the best route in the event a storm does not occur or taking the valley route which is said to be long and slow. Waiting would not help due to the apparent risk of wasting two days only to discover the storm and therefore having to take the valley route. The third route is the most warranted despite the fact that it might take me longer to get there; I can be fast and make it on time, void of risks like the occurrence of a mountain storm. 2. According to the model of strategic planning, strategy formulation involves the steps of selecting company goals, analyzing the external and internal environments, and choosing a strategy. How did your choice reflect these steps? (5 points) Strategic planning involves developing and maintaining consistency between the company’s objective and its resources. This sets the general direction for the achievement of its vision. In this case, the company’s goal is to secure the gold mine and immediately embark on the mining process, this leads to the achievement of the company’s primary objective, profitability from the sale of gold and ultimately value addition. Planning involves a process which entails making strategic choices as evidenced by the handout, strategic analysis and implementation. In this case, strategic analysis involves the attempts to understand the strategic position of a company by considering the effects of the environment on the company’s strengths and weaknesses. Environmental analysis is a core component of this process and it is reflected in my choice above – choosing the less dangerous alternative to minimize the risks associated with the exploration. Another important component of strategic analysis is the expectations, objectives and power. The objective of the company is to mine gold in the new territory. A secondary objective is to acquire the necessary authorization from the claims office in time, which largely depends on the feasibility of my choice and how fast I can get to the claims office. Resource availability is another factor in this process. It is evident that the company lacks the necessary resources to carry out the pre-mining activities as evidenced in the need for my sacrifice to try and get to the claims office in time despite my health.
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Explanation & Answer

Attached.

Running head: GOLD MINE SOLUTION PART II

GOLD MINE SOLUTION PART II
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GOLD MINE SOLUTION PART II

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Question 1 (picking the best option)
I will choose the option of Going with Pat. First, it is very risky to go alone because
the ankle may get strained more and make it impossible for me to reach the claims office.
Maybe my ankle may need first aid on the way and he will help. Also, havin...


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