Deliverable length: 750-1,000 words
The President of EEC recently called a meeting to announce that one of the firm’s largest suppliers of component parts has approached EEC about a possible purchase of the supplier. The President has requested that you and your staff analyze the feasibility of acquiring this supplier. Discuss the following:
* What information is needed to analyze this investment opportunity?
* What will be your decision-making process?
* All future costs are relevant in decision making. Do you agree? Why?
* Capital budgeting decisions fall into 2 broad categories: screening decisions and preference decisions. Discuss this.
* Which do you think EEC should use-screening decisions or preference decisions? Why?