You will utilize the information Resources and media to make a recommendation in regard to a capital expenditure. There is also an Excel template provided in the same entry that you may find helpful in completing this Assignment.

Better-made Appliances, Inc.is considering expanding its international presence. It sells 25% of all the toaster ovens sold in the United States but only 3% of the toaster ovens sold outside of the United States. The organization believes that it can sell more of its product if it has a production facility located overseas. Estimates concerning two possible locations, Kolkata, India and Dhaka, Bangladesh follow:

Possible Location

Kolkata, India

Dhaka, Bangladesh

Initial cash outlay

$5,500,000

$3,500,000

Useful life

20 years

20 years

Net cash inflows excluding depreciation

$1,015,000

$885,000

The cost of capital

9%

9%

Tax rate

40%

40%