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ABC is a American company that operates in the USA. It has large reserves, including 60 million $ that is going to be invested in
ABC is a American company that operates in the USA. It has large reserves, including 60 million $ that is going to be invested in establishing a new factory with a production capacity of 10 million units, either in London or in the Spain. The cost of establishing the factory in London is 90 million $, with a profit margin of 2.2 $. While the cost of establishing the factory in Spain is 100 million $, with a profit margin of 2.3 $. Note that the factory has a life span of five years, and the cost of debt in London is 3.3%, while in the Spain is 3%. The company's return on equity is currently 5%. Where do you think the company should choose to place the new factory? ABC is a American company that operates in the USA. It has large reserves, including 60 million $ that is going to be invested in establishing a new factory with a production capacity of 10 million units, either in London or in the Spain. The cost of establishing the factory in London is 90 million $, with a profit margin of 2.2 $. While the cost of establishing the factory in Spain is 100 million $, with a profit margin of 2.3 $. Note that the factory has a life span of five years, and the cost of debt in London is 3.3%, while in the Spain is 3%. The company's return on equity is currently 5%. Where do you think the company should choose to place the new factory
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