1) A large company is looking for setting up a new building in Ho Chi Minh, Vietnam as a Head office. The company bought a land in District 9 four years ago for $1,500,000 as anticipated to build a warehouse. However, the company has decided to outsource the distribution channel. If the land is sold today, it has a value of $2,000,000. The company wants to build a factory in this land. The site requires $100,000 worth of grading before it is suitable for construction. The construction will cost $4,200,000. The consulting cost relating to the land purchase is $5,000. Calculate the initial investment.

2) An international beverage company operating in Vietnam is deciding whether they should invest in product enhancement or digital marketing campaign. The product enhancement initiative will put the company in the right position to become an industry leader in innovation. The initial investment of the project is $5,750,000. Sales is estimated to be $1,750,000 for the first two years and from the third year onwards it increases $220,000 per year until the 10th year. The digital marketing campaign will help the company gain a greater market share and the cost of this campaign is estimated at $2,325,000. A monthly spending of $90,000 is charged for agency service, Google AdWords search volume, SEO (Search Engine Optimization), competitor data etc for the next 10 years. The marketing initiatives are projected to bring a fixed revenue of $3,150,000 per year for the next 10 years. Discount rate for both initiatives is 8.5%.

Requirements:

a) Use appropriate method(s) to evaluate both projects and select your preferred project.

b) Choose three qualitative factors (non-financial factors) on the philosophy of sustainable growth related to your selected project and explain how they will help the company grow sustainably.