Should the company shut down the plant

Reference no: EM133500820

Case: Your company builds a new plant with an investment of $100 million and an expected present value from its future cash flows of $150 million. Two yeartater, it becomes apparent that the new productisn't selling as well as expected, and the present value diiture cash flows at that point is only worth $50 million.

Should the company shut down the plant?

A. Yes, the net present value is now negative.

B. No, the present value is still $50 million.

Reference no: EM133500820

Questions Cloud

Draft set of financial statements for the year : Draft set of financial statements for the year ended 30 June 2035 and has included the following amount on the balance sheet

Calculate the required level of fixed assets for marvin : BADM 535- Calculate required level of fixed assets for Marvin Industries if company operates at no excess capacity with full capacity sales of $36,000 in 2020.

Start purchasing the needed inventory : After the loan paperwork was signed, the bank transferred $678,900 to PPI and the company was able to start purchasing the needed inventory

What are best practices for the creation of a business plan : What are best practices for the creation of a business plan that aligns with organizational goals, with the inclusion of a business planning model.

Should the company shut down the plant : Present value diiture cash flows at that point is only worth $50 million. Should the company shut down the plant

Biden ltds accountant discovered : Biden Ltds accountant discovered that the company had performed services for a client totalling $9000 but has not yet invoiced the client or recorded

Evaluate the business-product lines using a bcg matrix : Using an organization that you know well, evaluate the business/product lines using a BCG Matrix. Discuss whether the businesses /products represent related.

How the us health care system is financed : You must prepare a ten slide PowerPoint presentation summarizing how the US health care system is financed and upload it to Backboard.

Compare literature-outdated-broken decision-making processes : Compare and contrast from the literature, outdated, broken decision-making processes that can hamper organizational performance.

User Account

All Pages