EGN 3203 Case Study Analysis 3 Name: ID: The Cement Factory Case: Votorantim Cim
ID: 1108082 • Letter: E
Question
EGN 3203 Case Study Analysis 3 Name: ID: The Cement Factory Case: Votorantim Cimentos Noth America, Inc, is a sub-siday of a Brazl-based company that recenty announced plans to develop a new cement factory in Houston County ihe state ofGeoga. The plant be called Houston American Cement, or HAC. The location is ideal for cement making because of the large deposit of limestone in the area. The plant investment, expected to amount to $200 million, has been based planned for 2012 however, it is currenty delayed due to the economic downturn in construction. When the plant is completed and operating at ful capacty, based upon the projected needs and cost per metric ton, it is possible that the plant could generate as much as $50 000,000 annually in revenue. All analysis willuse a planning horizon of 5 years commencing when the plant begins operation As disaussed above, the Houston American Cement factory wil require an investment of $200 milian to construct. Delays beyond the anticipated implementation year of 2012 wl requaire additional money to constructthe factory.Assuming that the t of money s 10% per year, compound nterest, use bot, tabulated factor values and spread-sheet functions to determine the following for the board of directors of the Brazilan company that plans to develop the plant The equivalent investment needed if the plant is buit in 2015 The equivalent investment needed had the plant been constructed in the year 2008Explanation / Answer
a. The equivalent investment needed if the plant is built in 2015 is shown as follows:
200 [(1 + 0.10)^3] = 266.20 Million
b. Equivalent investment needed, had the plant been built in the year 2008 is shown as follows:
200 [(1 - 0.10)^4] = 131.22 Million
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.