Deutsche BraueriI. Introductory paragraphDeutsche Brauerei has been family-owned for 12 generations, which has created a high level of focus and control. Each generation has kept management and operating processes relatively simple, focused on brewing practices and quality. The rapid growth of Deutsche Brauerei in recent years can be attributed to several factors. The company's success lies above all in the product itself, which has won numerous quality awards and is very popular in Germany. Another factor contributing to recent growth may have been a bit unintentional. The purchase of new equipment in 1994, made necessary following a fire which destroyed the old equipment, allowed the company to increase its brewing capacity and efficiency. Finally, Deutsche Brauerei's decision to enter the Ukrainian market in 1998 contributed significantly to this rapid growth. The collapse of the USSR led to market reforms and Deutsche Brauerei jumped at the opportunity to enter the fragmented brewing industry, capturing the large population and capitalizing on its prime geographic location in Europe. Lukas Schweitzer was wise enough to hire local expert Oleg Pinchuk from a competitor as marketing director, and Oleg was instrumental in growing the company in Ukraine by securing accounts and implementing the field warehousing to support distributors. Deutsche beer was almost immediately very popular in Ukraine, and volume sales more than offset the depreciation of the Ukrainian currency. Sales in Ukraine represented 28% of Deutsche's total sales and increased from 4,262 euros in 1998 to 25,847 euros in 2001.II. Problem Statement Greta, Lukas' niece and recent MBA graduate, has recently joined Deutsche's board of directors and must make a recommendation on three issues: the financial plan for 2001, the declaration of a quarterly dividend and the adoption of the proposed incentive. and compensation for Oleg. The financial plan includes an investment of 7 million euros in new facilities and equipment for the Ukrainian operations in 2001, followed by an investment of 6.8 million euros in 2002 for a new Ukrainian warehouse and distribution center. This is a significant investment, and the opportunity to put down roots in Ukraine in this way must be fully evaluated before Deutsche commits to such an expensive project. The proposed quarterly dividend is 698,000 euros, an amount equal to 25% of the amount planned for 2001. dividends.