The operations management team evaluated, ranked, and recommended a set of capital projects, using evaluation tools, such as NPV, payback, and IRR. The evaluation, ranking, and recommendations were by category of expenditures with the intent of establishing the cost of fully equipping a facility in compliance with the planned expansion. The fully equipped facility cost was then evaluated using tools, such as payback, NPV, and IRR.
As part of the operations management team, you will do the following:
- Explain your recommendations about the choice of capital projects to the business owners, comprising the two founders and private investors.
- Consider the following points while providing your recommendations:
- What factors will you consider before planning the recommendations?
- How did the use of tools, such as payback, NPV, and IRR, help you in evaluating the fully equipped facility cost?