Discuss How It Might Influence Mr. Hansson To Make The Decision
STRATHMORE UNIVERSITY
MANAGERIAL FINANCE ASSIGNMENT
STUDENT NAME: LINDA MCGAW
ADMISSION NO: 061902
SUBMITTED TO:
SUBMITTED BY: 28TH JUNE 2016
CASE; HANSSON PRIVATE LABEL, INC
EVALUATING AN INVESTMENT IN EXPAANSION
Identify the main dilemma and the key questions Mr. Hansson needs to respond to. Analyze in detail information in relation to the following and discuss how it might influence Mr. Hansson to make the decision (without any calculations)
The main dilemma Mr. Hansson is facing is whether to invest in the proposed $50 million expansion project proposed by his manufacturing team and how to finance it, should be financed through equity or through additional debt.
Just to provide a detailed analysis that
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At this point with 90% capacity in operations, an expansion project seems lucrative on face value, however further analysis needs to be conducted, especially since it entails accommodating one of the most powerful retailers in the next 3 years. This will expand its customer base, provide opportunities to grow regionally and abroad and might change the competitive landscape. HPL’s competitors will definitely shy away from investing or expanding in the personal care product when they make the announcement of the multiyear contract with a powerful customer. This will give HPL a competitive edge in the industry and have the biggest market share by …show more content…
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