Reference no: EM131486059

Blaine and Solera are discussing the possibility of forming international joint venture. Solera is very optimistic about future revenues. Her team of analysts have studied the market for the past six months and are confident profits will reach $300M USD in the first year. Blaine is a little more conservative in his estimate. After careful review, his marketing specialists predict first-year profits will be only $250M USD.

If Blaine and Solera can agree on how to split the profits, they will reach an agreement. Solera really wants this deal to go through, so she has set a reservation point at keeping 45% of the profits. Of course she'd rather keep more. Keeping 70% would be ideal. Because Blaine is less optimistic about the future, he had decided he wants a payout of between $100M USD and $175M USD.

Blaine's company is in charge of collecting all sales revenue, so the arrangement they make will effectively be that Blaine will "pay" Solera a share of the profits. Describe a deal between Blaine and Solera that is wise, creates value, and will "get all the money off the table" (or at least as much off as possible). You may set up the profit sharing arrangement in dollar amounts, percentages, or a combination of both.