Problem Description
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.
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.
Also please provide a graph for country to help the reader to understand the analysis.
the guide format is attached
2 pages answer only
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