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CHINO MATERIAL SYSTEMS Case 95 Q . ce Capital Budgeting Decision Mthods ©” Dirsoted ee at {Caso Maer Syms to, manofetrs conveyer ba ra Ilion sya tht re ed inva variety of inbaites ncleding rianafatorng sal raspeAuien. The comple syste lncheoe ophitietd saci ns and anda Rw formers of teacup {tom ove vorkion he net, Basso af ana ane st thea tocheogy he ey a ‘lcs fs mater of sployes aad fe sited eet Gnsamtion needed to mova mss for isuet. Te compeny so bl open egw fo spend cone” esa ‘teal and con devclop ung spe ia tly asic, Hisocally, de sales daparenen's {Bajrfocar war on domcoctatng te TeIAbINY nd fcknoingkalsupeseny of fe t's {fodea le Max Di, compas reds, scanceroed it males growth hs slew ani ‘Sia soul ussining heenepen+ maha yoason Tio year 369, cau) bad Chery! Rees a an assbant to tho Chief Fash fice Sho a est copleat ber MBA in nce afer apnding do reviews ie yeu in ‘ni evel suatingpoeton ®t muaeacing company. Hor fat uigmment wi te ‘Scepy wat 2 enor crypt nancial analyses ef tho isfy whe copays “pers to Nelp China Matra Sysome rains compattive Her anatyss deter 2 los change tomers ype lati wich fave ected he compa. To he ae force opent console new alert ning acconts bred en fe song ‘eps fu wad tecnica oppor. Ghoe te reiuoubp wes saab hs canoe tended fot wi compen. Mor eos, umenets hive become mae ee cesses tad {ebigh eof or ant ene bas pale acted pcs. "Tha spony macnn drt, ay Sch, ede ht many of Co's taco csofmets meily he embark on ort cating ogra. she we roncime sbect sing ‘She the los face dé not Incorporate sone srt of ost booei nals int a statins. ety wre sei othe CFO rnin it he lead Cheryl masa lp {hem develop entation! procafuothat he sks force could ws to demensate the Huse benefits of buying Chine Material Syuoms prodacis Caml ae excited by te challenge of ‘Santis pews marking execence wits xia expertise "A hm gan th aba igen, Chey ky camo to the concslon at a oe way to "sal rym to 8 cetcosclus cuseer was fo develop apie btn rye whch would dasa the cat eectenes of moto. Ske aod Be Coal 3 trang etn fo burs Qo oo fp sas manauus snd so Oat oy cou oie pet Ino he ew oogase Toe anagors wos sacita aout the change, a5 ny boleve that an Cifecive foafeit procteulon testers soo inouve talked sare fer the SOUpsty Sowever, nce gw of the sais force Bad « tchcal eekgrontd ead ached financial ‘anagem tvinsg, management wes conartad boat tir ay explain the capt Tongtngyrocos to customer Ea als pron owl) earls «api computer co vader Cals am eos, to manogers beers fnlexpeencuvet ol at alows changing amie 22 Sdn ted & ‘npr eapele inter ton wot ell Chg dat lo vn ye force of Cho Mei Scones ai cae np 28 i oman Concha tpn 9 GP Maracang i sn portar wa tm ston “OP Muuttrng iv cosdrng ths prc of $285,000 ron hese ose, ‘nol ea tapping, om Coo Mas Sn ple x em mld ‘Sw Grating stot 16000 lt st, xp wel Me 0 {ou vice pono oor the deci a of i ups. AN MACRS daseite of fre yas wold be aol Yt he se as woes pu willbe sd fet pera feo aa weg expe to ge mc the spr Wea be pled: Honor he company balsam seg the psa or $100 a hie yn woe teeth ym ws as bon ae rao eno sd whch hs bon fly dpi. ot ramen hs caret te 0G ‘Sanya soe at S410 very abe. Tx svete eso 9 a Br ‘Shy, man ang, war naranes rues alow ery coin Sa ‘Sates weld ive GP Maung S7OD0 seal nas opera cons Fer cpl dg OF Mamtrg ana 12 pce co of pl fits dela face 3 pcan yd hy ge Cnr! on sacg a art iw Chey Ste ste noid IR (MIR ar om of decor etre She rey dat Max Doe poor te tras rar nae ts poet aloe ol St decent abana {Spal Patpting wine se leaned cs MIRR'eepee charges over he est RK Stn, To singly walls, Chel aed woune at odious onpee ‘Ton tthe th Sonpen scx of expe Homer hk np et ted ‘Phare dfn te fort cot of Poros wt ime. "Pa yuri spston, ts develo pial Puaing way fr teste and recs tinng sono foro company’s es ace. As ou go ah Be sawp ‘Bi tt po of i tnajsbino Rp Caos Mal Sates a ere Ta eg ter nase cpl 0 heals st be Char wp, tly comes er wee aay man teal be pt, i mt ao be ‘SSetandi dct a the pvt Ts ab pean es bee ‘Govern ea gees ni fans proosnce chances oe upc tte “Sanpclonewoejing Oy exis Steal con et The mee od be Mls ‘eogbto jd shnges incor ofp cy, dca com ss Ath ts mal or of he ning fy fos acpi big ey, Caryt fei toon baat ohne he a opornev supsi Bo ences ops wo ‘ea tet Cows Tetras npr to Oe pote The a ‘eee je ats sds rape ae gay tm ee company a fer eofainp exter tows. i oA ‘ Your __Ne Gan Fow Pn oc ° Gia) “sper 2 i ws000 wo a "Tee ssond oa project uiing ge aout costs athe end of wf ye Insane cas Ness is produ ght a oor Year Net ee $50.000) mn : "x00 # 2 enn, ferent

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