writing executive summary for engineering economics class
Your client, Heidari, Incorporated, is going to build a new wind turbine manufacturing facility. Heidari, Inc. is a multinational corporation based in Des Moines, Iowa United States. The budget for completing the facility and purchasing and installing the machinery is estimated to be $3.9 million (assume $3 million for the facility and $900,000 for machinery). It will have a net annual income cash flow of $850,000 for the next 10 years (gross income before taxes). Initially, they were planning to locate the facility near their US headquarters location where their combined incremental tax rate would be 30.48% (calculated from 21% Federal and 12% State). However, they have been approached by the Danish government and want to evaluate the option of building the facility in Denmark against their original plan of building in the US. Assume that the interest rate is 8% per year (or MARR for both countries). You will need to research tax methods and depreciation rules in Denmark and compare with those of the US.
Your consulting firm, [Your name] Consulting, has been hired to complete an evaluation and make a recommendation for where to build the plant. As part of your initial engineering economic analysis for this problem, you must examine global political, environmental, and social considerations that contribute to responsible and ethical engineering problem-solving, and that might affect Heidari’s reputation and the operation and profitability of the plant.
Additionally, you will complete a financial analysis using a calculation of the after-tax present worth of adding the new manufacturing facility in each of the two countries (Denmark and the United States). You will need to research tax methods and depreciation rules in Denmark and compare what you find with those of the US. Use these results to recommend where to make the investment.
The final step of your project will be to write an Executive Summary. You will make a recommendation for plant location, and you will justify your recommendation using the cultural/social, political, environmental, and economic research and analysis that you conducted throughout the semester.