Decision Library
Every capital case is a set of assumptions in disguise
An investment proposal arrives as a single number: a payback period, a return, a valuation. Behind it sit a dozen assumptions about growth, cost, timing and the exit, and those assumptions are the real decision. A Decision Room compares the proposal with the other uses of the same money and keeps each assumption visible.
Argumont provides structured analysis. It is not financial, legal, or investment advice.
The other uses of the money
Every capital decision competes with alternatives: a smaller first step, a different project, paying down debt, returning cash to owners, or holding it in reserve. Waiting is also a decision, with its own cost if prices rise or a rival moves first. A proposal compared only with doing nothing will look better than it is.
Test the case, not the headline
Discounted cash flow remains the standard method: estimate the cash a choice will produce in each year, and discount it at a rate that reflects the risk and the return available elsewhere. The internal rate of return is popular but can mislead, because it is a percentage that ignores the size of the investment and tends to flatter projects that return cash early.
The habit that matters most is building three cases rather than one: a base case, a plausible downside and a plausible upside, each with its assumptions written down. If the ranking of options changes between cases, the decision turns on whichever assumption drives the change, and that assumption deserves the next week of work.
Evidence that carries weight
Audited or management accounts for a business being bought, actual unit costs from operations rather than plans, dated comparable transactions, signed customer contracts, and the legal and tax constraints your advisers confirm. Promised savings from a combination and projected growth rates are predictions, and the Inspector marks them unverified until something observed supports them.
How the room argues a capital case
Each use of the money gets a Champion, so holding the cash is argued as seriously as the deal. The engine works the sums from your own figures, and the Red Teamer runs the downside that breaks the case: revenue 20 percent below plan, a year's delay, a key customer leaving. The Grandfather asks what cannot be undone once the money is spent, and what the cheapest way back would cost.
When the record cannot separate the options, the Verdict says No Strong Winner Yet rather than inventing a margin. Otherwise it names the assumption the leading case rests on, and the owners or board record the Human Decision.
What to weigh
Downside exposure
What is lost, and how fast, if the central assumption fails.
Time to cash
When the money returns, if it does, and how sure that timing is.
Assumption load
How many unverified claims the case depends on, and how heavily.
Opportunity cost
The return the same money could earn in its best alternative use.
Reversibility
Whether the position can be exited, sold or scaled back without lasting damage.
Where it goes wrong
Spreadsheet precision
Two decimal places lend authority to inputs nobody has checked.
Sponsor incentive
The person proposing the investment gains if it proceeds, whatever the outcome.
Savings optimism
Savings from combining two businesses are assumed in full and on time.
Acquire, invest, or hold
A company with $6 million in cash is offered a small competitor for $2.4 million. The target earns $270,000 a year in operating profit, so the price is about nine years of current earnings. The proposal adds $350,000 a year of savings from combining teams, which brings payback under four years. The alternative is spending the same $2.4 million on distribution over two years, which the sales team estimates would add $1.1 million in annual gross profit by year three. The third option holds the cash as eighteen months of extra runway. The Inspector marks both the savings and the distribution estimate as unverified. With weights of downside 30, assumption load 25, time to cash 20, opportunity cost 15 and reversibility 10, the Verdict finds No Strong Winner Yet and names what would separate the two: a line-by-line plan for the combined savings, and a three-month distribution pilot with measured results.
Questions
- Can I bring a financial model?
- Yes. Paste the key figures and the assumptions behind them. The engine recomputes the sums the question asks for from your inputs, and the room argues the assumptions rather than the formatting.
- Is a Verdict investment advice?
- No. The room tests reasoning and evidence. What to buy or sell, and any regulated advice, remain with you and your licensed advisers.
Bring Argumont a Decision worth challenging.
Start with a paid 60 day pilot on your own real Decisions.