PhysiMetrics’ BioScan Project

Jess Patterson from PhysiMetrics (PM), a company producing and selling affordable, easy-to-use electronic products, is finalizing her capital budgeting analysis of the BioScan, a new wrist-mounted or arm-mounted biometric device. She is due to meet the next day with her boss Christian Thalen and personal products portfolio manager Amber McCain to review the financial investment decision (FID). Jess has been working on the project for eight months and has become a strong advocate for the BioScan. She knows that both Christian and Amber will need convincing and will likely ask challenging questions about various aspects of her analysis, particularly her estimation of the project’s cash flows. This case may be used in a core finance course, either undergraduate or graduate, to familiarize students with the most relevant aspects of capital budgeting decisions. It allows students to understand the incremental impact of a project, build a financial model in Excel, carry out sensitivity and scenario analyses, and recommend whether to invest in the project or not, incorporating both financial and non-financial considerations.