ZuoTi.Pro
Question

A company wants to manufacture products that are currently made in China in the US for...

A company wants to manufacture products that are currently made in China in the US for the next three years until the COVID 19 situation is under control before moving the production back in China. They need to buy equipment to get this started. What type of long-term financing would you recommend and why-- Lease OR issue convertible bonds?

business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Answer )

The company is temporarily shifting from china due to COVID 19 and the period mentioned is around 3 years.

So the long term financing that i would recommend is leasing, since the equipment will be needed for not very longer period of time as they will eventually shift back to Leasing will facilitate with normal lease payment and will return the equipment after using it temporarily.

So the company could save cost that it will require to raise to issue convertible bonds..

0 0
Add a comment
Know the answer?
Add Answer to:
A company wants to manufacture products that are currently made in China in the US for...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • 34 - 36 34. You are interested in not only US stocks but also foreign stocks....

    34 - 36 34. You are interested in not only US stocks but also foreign stocks. You are considering whether to invest in American Depositary Receipts (ADRs, they represent ownership in the shares of a foreign company trading on the US financial markets.) of a Japanese company and a South American company. Other than market risk and firm risk, currency risk is also a concern. You know that both firms' major profits come from their domestic operations. You believe in...

  • Question 3: Make versus buy You make refrigerators. Currently, you manufacture compressors for your refrigerators in-house....

    Question 3: Make versus buy You make refrigerators. Currently, you manufacture compressors for your refrigerators in-house. An outside supplier has offered to sell you equivalent compressors at a wholesale price of $65 per unit. You need 1,000 compressors per month. The internal production costs per compressor are as follows: cost per unit direct materials $20 direct labor $20 variable overhead $20 total If you outsource the production of compressors (the buy option) in the short term, how will this choice...

  • Tip Top Canadian Inc owns a nationwide chain of supermarkets. The company plans to open another...

    Tip Top Canadian Inc owns a nationwide chain of supermarkets. The company plans to open another in Montreal, Quebec. In discussion about how the company can acquire the desire building and other facilities need to open the new store, Tony Wong, the Company’s vice-president in charge of sales, stated, “I know most of our competitors are starting to lease facilities, rather than buy, but I just can’t see the economics of it. Our developments people tell us that we can...

  • 6. EBIT-EPS analysis - Part II Aa Aa Mother Earth Inc. (MEI) was started three years...

    6. EBIT-EPS analysis - Part II Aa Aa Mother Earth Inc. (MEI) was started three years ago by two friends who recently graduated from Blue Rock College. MEI, a multimillion-dollar distributor of environmentally friendly products, currently sells products made by other manufacturers. The management team is now considering the purchase of the manufacturer of MEI's bestselling product. The acquisition is expected to cost $6,000,000, but MEI's chief financial officer (CFO) is unclear as to whether the purchase should be financed...

  • 1. Using NPV approach, determine whether Tip Top Inc should lease or buy the new facility....

    1. Using NPV approach, determine whether Tip Top Inc should lease or buy the new facility. Assume that you will be making your presentation before the company’s executive committee, and remember that the president detests sloppy, disorganized reports. 2. What response will you give in the meeting if Tony brings up the issue of the buildings future sales value? Tip Top Canadian Inc owns a nationwide chain of supermarkets. The company plans to open another in Montreal, Quebec. In discussion...

  • Example 1: Life Force Ice Cream wants to expand their capacity by adding a new filling...

    Example 1: Life Force Ice Cream wants to expand their capacity by adding a new filling line for pints of super premium ice cream. What other source of financing could they use besides bank debt, cash or leasing? Example 2: Synergy Software wants to expand into 17,000 square feet of office space. There is a high variability of demand for their product and it looks like they can get a 5 year contract from their customer. Should they lease or...

  • Part I: Initial Expansion Gonzales is a closely held corporation considering a major expansion. The proposed...

    Part I: Initial Expansion Gonzales is a closely held corporation considering a major expansion. The proposed expansion would require the firm to raise $10 million in additional capital. Because Gonzales currently has 50 percent debt and because the family members already have all their funds tied up in the business, the owners cannot supply any additional equity, so the company will have to sell stock to the public. The family wants to ensure that it will retain control of the...

  • Please read this article about China economic development and type a summary (2 paragraphs) about it...

    Please read this article about China economic development and type a summary (2 paragraphs) about it its struggles comparing to the U.S and other countries. Get Homework Hep wa Connect Class: 18 210 nbox (10) habuzaidBe Courses-Blackboard Le. 2016 FordE xplorer XLT How to Wholesale and S SIGNIN PRO wATCHLIST MA KEIT NBC USA INTL MARKETS BUSINESS INVESTING TECH POLITICS CNBC TV ▲T CNBC HEALTHY RETURNS CNB ▼ HEALTHY RETURNS Investing in Health Care Innovation MAY 21 NEW YORK JOIN...

  • CASE STUDY Apple's iPhones-Not "Made in America" and most Apple has become one of the best-...

    CASE STUDY Apple's iPhones-Not "Made in America" and most Apple has become one of the best- h, al operation in part ahrough The globalization of human c There are risks and rewards for all in a global economy in a range of contractors, firms winners and losers around the world companies and their stockholders, res · s up and down the supply chain, employed people, and unemployed people tie In February 2011, President Obama asked Apple's Steve Jobs(nowdee why Apple...

  • Case assignments must be completed with a written 2-page study on the assigned case questions in...

    Case assignments must be completed with a written 2-page study on the assigned case questions in the textbook. The format requested for these assignments is based on elaborating and including two basic parts in the essay: 1) in a bullet presentation style (one phrase each bullet), list a summary of the key issues, situations, problems, opportunities and threats you may identify as relevant; 2) answer all the questions listed in each case in two or three sound paragraphs. Use the...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT