407 Homework 1
EPOM 407
1.
Homework 1
Due 9/2/2014
Types of investment projects and decisions:
For each of the scenarios that follow, define whether the project is a profit-enhancing, cost-control, or publicimprovement program. If possible, define the scenario further as an expansion, replacement, or abandonment decision. a) Kia Motors, a unit of Hyundai Motor Co., of South Korea announced that it would invest EUR 1.1 billion to build an automobile-manufacturing plant in Zilina, Slovakia. The plant is expected to enter operation in
2006 with a capacity of 300,000 units.
b) BP said it would invest $1 billion through 2010 to upgrade process control systems and maintenance procedures at its Texas City refinery, where an explosion in 2005 killed 15 and injured 170. The U.S.
Department of Labor uncovered over 300 health and safety violations, resulting in a maximum fine of $21 million. c) Emerging from its first bankruptcy, US Airways placed orders for 170 new regional jets (with 50-75 seats each), with options on an additional 380 planes to grow the firm's route network. The orders were split between rival manufacturers, with 85 planes from Bombardier and 85 from Embraer. The 170 planes were valued at $4.3 billion, according to list prices.
d) NASA expects to spend $104 billion to return to the moon by 2018 in a "crew exploration vehicle," which is expected to replace the shuttle.
e) The port of Yangshan, 90 miles from Shanghai, opened the first five berths of its shipping facility in
December of 2005. This is the first phase of investment, with plans to have as many as 50 deepwater berths by 2020 to provide shipping capacity to the Shanghai region. The Shanghai International Port Group, owned by the Shanghai municipal government, is the sole operator of the berths.
f) December 9, 2005, marked the last day that a "London bus" (a double-decker, half-cab bus with an oldfashioned bell and conductor) operated on a mainstream route in London. Reasons for the change include the new
1.
Homework 1
Due 9/2/2014
Types of investment projects and decisions:
For each of the scenarios that follow, define whether the project is a profit-enhancing, cost-control, or publicimprovement program. If possible, define the scenario further as an expansion, replacement, or abandonment decision. a) Kia Motors, a unit of Hyundai Motor Co., of South Korea announced that it would invest EUR 1.1 billion to build an automobile-manufacturing plant in Zilina, Slovakia. The plant is expected to enter operation in
2006 with a capacity of 300,000 units.
b) BP said it would invest $1 billion through 2010 to upgrade process control systems and maintenance procedures at its Texas City refinery, where an explosion in 2005 killed 15 and injured 170. The U.S.
Department of Labor uncovered over 300 health and safety violations, resulting in a maximum fine of $21 million. c) Emerging from its first bankruptcy, US Airways placed orders for 170 new regional jets (with 50-75 seats each), with options on an additional 380 planes to grow the firm's route network. The orders were split between rival manufacturers, with 85 planes from Bombardier and 85 from Embraer. The 170 planes were valued at $4.3 billion, according to list prices.
d) NASA expects to spend $104 billion to return to the moon by 2018 in a "crew exploration vehicle," which is expected to replace the shuttle.
e) The port of Yangshan, 90 miles from Shanghai, opened the first five berths of its shipping facility in
December of 2005. This is the first phase of investment, with plans to have as many as 50 deepwater berths by 2020 to provide shipping capacity to the Shanghai region. The Shanghai International Port Group, owned by the Shanghai municipal government, is the sole operator of the berths.
f) December 9, 2005, marked the last day that a "London bus" (a double-decker, half-cab bus with an oldfashioned bell and conductor) operated on a mainstream route in London. Reasons for the change include the new