Corporate Finance

The second writing assignment is due at the end of Module 6. You are advised to begin working on the second writing assignment during Module 4.

This writing assignment should be in an essay format. It should use two or more published news or academic articles which are less than a year old

as cited references. This writing assignment addresses the values learning outcome (LO7) as detailed in the syllabus.

For this assignment, assume that you are a corporate manager that needs to make an important decision. Your company currently has its largest

factory (700 employees) located in the Midwestern United States. This factory is currently not competitive in international markets and its poor

results are threatening to force the entire company into bankruptcy. The company employs 3,000 in other areas of the U.S.

You have to decide whether to keep the factory where it is or move it to Canada or Ireland. You can only keep one factory open. The corporate tax

rates of Canada (20%) and Ireland (15%) are much lower than the U.S. (35%). Labor costs will not change significantly because the cost of training

new employees will be offset by the replacement of highly paid senior employees with younger employees in the other countries. The old factory

needs extensive renovation which will still not leave it as efficient as the new factories planned for the new countries. Therefore, the NPV of

the capital investments involved are equal for all three countries.

You have calculated the NPV of each choice. The NPV of keeping the U.S. factory open is $1,000,000. The NPV of moving the factory to Canada or

Ireland is $10,000,000 and $35,000,000 respectively.

In this writing assignment, you should answer the following questions:
• Where should your factory be located? Why?

• Who are the stakeholders in this decision? How did you take the stakeholders into account when making your decision?

• How does your decision support responsible stewardship and integrity in the context of financial management?

The essay will be in APA format and be 500-1,000 words in length (this range includes everything in the assignment including your name, title, and

citations). Turnitin.com software will be used to ensure that submitted assignments are original works. See the rubric on the next page for

complete grading criteria.

Recent published news or academic articles are available in the ProQuest database at the Saint Leo University Library website.

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