Practice improvising your way through a capital investment problem.

1. SkimaTalk Official Course
Advanced Improvisation – Business Problems
Lesson 4: Should We Build a New Warehouse?

2. Story: Should We Build a new Warehouse?
2
XYZ Industries is considering building a new warehouse close to its top customer. The new
warehouse will be profitable for XYZ as long as gasoline prices in the U.S. remain above the
historic average of $3 per gallon. Economists are confident that gasoline prices will be well
above $3 per gallon in the long term, so the project is expected to be profitable.
Time
Price /
gallon
$1
$2
$3
$4
$5
Expected gas price
Break even gas price
Projected Profit

3. 3
End of Lesson
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