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September 16, 2022

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.

Description

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?

In your own

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