East Georgia Construction Company (B)
3 Pages Posted: 21 Oct 2008
A construction company serving a 20-county area of eastern Georgia has as its main source of revenue the manufacture and placement of asphaltic concrete used in road construction. In response to the demands of a new, multiyear, state-funded highway program, the company needs to expand its manufacturing capacity. Now, in addition to the new portable drum-mix plant (whose price has been reduced), described in the A case (UVA-QA-0664), there is a used nonportable batch plant available at a very attractive price. At issue is which of the two solutions to pursue.
Keywords: decision analysis, discounted cash flow, financial analysis, risk analysis
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