An electronics firm is considering how best to supply the world market for microprocessors used in consumer and industrial elect
ronic products. A manufacturing plant costs approximately $500 million to construct and requires a highly skilled work force. The total value of the world market for this product over the next 10 years is estimated to be between $10 and $15 billion. The tariffs prevailing in this industry are currently low. Should the firm adopt a concentrated or decentralized manufacturing strategy? What kind of location(s) should the firm favor for its plant(s)?
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Answer:
The answer is "68,788".
Explanation:
Net cash flow present value = immediate deposit + Annual lease payment present value
Net cash flow present value