In this assignment, you will take on the role of a senior member of the finance team assigned to lead the investment committee of a medium-sized telecommunications equipment manufacturer.
finance
Description
Overview
In this assignment, you will take on the role of a senior member of the finance team assigned to lead the investment committee of a medium-sized telecommunications equipment manufacturer. Your team is evaluating a “make-versus-buy” decision that has the potential to improve the company’s competitiveness, but which requires a significant capital investment in new equipment. The assignment is organized into two parts:
Opportunity Details
The new equipment would allow your company to manufacture a critical component in-house instead of
buying it from a supplier. This capability would help you stabilize your supply chain (which has suffered from
some irregularities and quality issues in the past). It could also have a positive impact on profitability through
the absorption of fixed costs since this new machine will have plenty of excess capacity. There may even be
a possibility that the company could leverage this capability to create a new external revenue stream by
providing services to other companies.
The company has been growing steadily over the past 5 years, and the financials and future prospects look
good. Your CEO has asked you to run the numbers. After doing some digging into the business, you have
gathered information on the following
