. A large company ABC, with a capital of P100,000,000.00, is confronted with a lot of problems in their manufacturing complex situated at the Sierra Madre mountains. It currently employs 400 people, 95% of them are from the area. The government seems to be gaining support against the local rebel forces who continue to fight the government. In December of 2020, the company has set for 2021 an ROI equivalent to 30%. Last December 2021, ABC has so far achieved an ROI of only 20%. After an in-depth study, an alternative Plan P, which is the adoption of a capital intensive approach through the acquisition of more advanced equipment worth P10,000,000.00, could definitely achieve an ROI of 36% for 2022. This Plan P, however, entails the retrenchment of about 25% of the workforce. If you were a member of the Board of Directors of ABC, should this modernization plan push through? EXPLAIN FULLY.
. A large company ABC, with a capital of P100,000,000.00, is confronted with a lot of problems in their manufacturing complex situated at the Sierra Madre mountains. It currently employs 400 people, 95% of them are from the area. The government seems to be gaining support against the local rebel forces who continue to fight the government. In December of 2020, the company has set for 2021 an
Step by step
Solved in 2 steps with 2 images
