Speed Ventures Case

Arianna Marrou, Andrea Aleman & Andrea Delgado

1. There are four situations in the given case:

a) Race and end in top 5

b) Race and not end up in top 5
c) Not racing
d) Racing and engine blowing

expenses t POCONO entry fee :

30,000
T

race $ end Profit 2,040,000

in top 5

"
Tire sponsor :
40,000
earnings 2,000,000
new sponsorship : -

expenses t POCONO entry fee :

30,000 -

profit : 10,000
race 13 not

end in top
-1 40,000
5 earnings t tire sponsorship :
-

POCONO entry fee :

50,000
expenses 1011 from sponsorship :
25,000
T
NO Change

Not racing
-1
earnings a tire sponsorship :
40,000 -

reimbursement fee :
15,000

30,000
-

Pocono entry fee

- :

expenses tire sponsorship 40,000

:
y
-

-
Oil sponsorship : 800,000 loss :
870,000

racing $
Engine blowing
-1
earnings → non
-

From our decision tree’s analysis, we could conclude that whether they win or not the
race, they should race. The reason for this is that they will always make profit as long
as they race. Hence, they should race Pocono.
2. As stated by the mechanic, engine failure can happen due to the ambient
temperature. The situation analysis has to do with cognitive bias.