Heartland Fabrication is considering a $130 million capital investment to expand production by building a new manufacturing plant and distribution center. Several prospective locations and build concepts are being evaluated.
As the capital investment team evaluates the opportunity, several factors are being considered. All these factors are brought together to form an investment strategy and, ultimately, to determine which option provides the greatest net benefit to the company.
Several investment profitability models are used to quantify the alternatives, including discounted cash flow and payback methods.