The employees are uncertain of the time value of money, so they need to run a few scenarios. Perform steps 1 through 3 below using EACH of the time value of money estimates as a different scenario. Determine the outcome of the strike vote (go on strike or not go on strike).
1. Calculate the present value of the company offer for each of the employee groups. (12 marks)
2. Calculate the present value of the union increase for each of the employee groups. (12 marks)
3. Cast the votes according to your results and determine the strike vote outcome under each time value of money possibility. (12 marks)
4. Management is trying to figure out the most likely outcome of the strike vote so that they can adjust their bargaining strategy if necessary. Based on the completed scenario analysis, what outcome should management plan on? (4 marks)