FIN 6537 -Your corporation has an opportunity to make a major investment
January 3rd, 2018
Your corporation has an opportunity to make a major investment in China of $100 million to develop an offshore manufacturing facility. When this plant is fully developed and becomes operational in two years the corporation can close down its current manufacturing facility in the United States and shift operations to China. At present, the expected annual savings in labor and benefit cost is expected to be $20 million. You are asked to develop a proposal to identify the potential risk of this proposal and ‘advantages’ and ‘problems’ of this opportunity. Explain how you would proceed.