Since the beginning of the year 2020, the COVID-19 pandemic, with the emergence of new variants of
Fantastic news! We've Found the answer you've been seeking!
Question:
Since the beginning of the year 2020, the COVID-19 pandemic, with the emergence of new variants of the virus, looks set to become part of our everyday life. While many businesses have been negatively affected, there have also been some that have benefitted, such as the producers of face masks and antigen tests, to the extent that they are unable to meet demand. As a result, many companies involved in the production of these products are looking for new investors to expand the capacity of their facilities.One such company intends to acquire new assets worth 2.2 million euros, which, according to their calculations, will generate a total of 180,000 euros in the first year, and with a growth rate of 4% per year forever.a. If the company requires a rate of return of 11%, should the company invest in expanding its capacities? Explain your decision.b. Despite their expectations, the company is not sure that they can continue to grow at 4% per year. What rate of growth would they need to achieve to reach the required 11% rate of return?
Related Book For
International Marketing And Export Management
ISBN: 9781292016924
8th Edition
Authors: Gerald Albaum , Alexander Josiassen , Edwin Duerr
Posted Date: