Sweet Dreams: Creekside Maple

Amy Hill had hiked to the top of her 44-acre property with her 5-year old son to think about the tough decision she had to make later that afternoon. If she and her family moved forward, she would become the owner of Creekside Maple. They had been approved for a $50,000 start-up loan at 5% interest for 5 years. She and her husband, Andrew, had been considering this option for some time and recently built a post-and-beam barn that could house the new operation. Questions that were on her mind included, “If we go through with this, can we afford it? It’s not about making a ton of money but building a future for our family. Are we taking too much risk? What if the climate changes and the sugaring season continues to shorten? Will we ever earn our investment back and turn a profit?” This decision-based critical incident includes building a five-year decision model resulting in an NPV (net present value) calculation and conducting scenario analysis for a “good” vs “poor” climate of maple production. It is designed for use in an undergraduate entrepreneurship or family-entrepreneurship class or as an example of forecasting and decision making in a management or finance course.