Proposal A New Factory
Assume discount rate or weighted average cost of capital 10%- Ignore all taxes and depreciation.
A company wants to build a new factory for increased capacity. Using NPV method of capital budgeting. Building new factory will increase capacity by 30%
Current capacity is $10 million of sales with 5% profit margin
Factory Cost $10 million to build
New capacity will meet company need for 10 years
The factory is worth $14 million over 10 years. Should this project be accepted or rejected
Explain effect of higher and lower cost of capital on firm’s long-term financial decision.
Apply calculations analyze the use of capital budgeting techniques in strategic financial management
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.Read more
Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.Read more
Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.Read more
Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.Read more
By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.Read more