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Dixon

The Dixon Corporation is looking at an opportunity to purchase a new chemical plant in Collinsville Alabama. This plant acquisition would fit nicely into their current strategy of providing chemicals to their current customers. The Dixon Corporation has three options when it comes to the acquisition of the Collinsville plant. One, they could decide the price of the plant is high and decide not to invest in the new plant. Two, they could purchase the plant for $12 million and use the current method of electrolysis using the traditional graphite electrodes. And three, they could purchase the plant for $12 million and invest an extra $2.25 million to upgrade the process of the electrolysis to using laminate graphite electrodes. The method they should use to analyze the benefits associated with the possible purchase of the Collinsville plant is, find the net present value of the free cash flows generated from the plant over 10 years. This method will allow them to analyze the......


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Approximate Word Count: 1704
Approximate Pages: 7 (250 words per double-spaced page)

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