ACME Toaster Ovens, Inc.

Home Appliances, Inc. is considering expanding its international presence. It sells 25% of all the toaster ovens sold in the United States but only 3% of the toaster ovens sold outside of the United States. The organization believes that it can sell more of its product if it has a production facility located overseas. Estimates concerning two possible locations, Ho Chi Minh City, Vietnam and Hanoi, Vietnam follow:

Possible Location	Ho Chi Minh City, Vietnam	Hanoi, Vietnam
Initial cash outlay	$4,500,000	$2,500,000
Useful life	20 years	20 years
Net cash inflows excluding depreciation	$965,000	$790,000
The cost of capital	9%	9%
Tax rate	40%	40%

• Part 1:Prepare a spreadsheet using Excel or a similar program in which you compute the following for each proposed location.
  • Accounting rate of return on investment
  • Payback
  • Net present value
  • Internal rate of return
• Part 2:Utilizing Word or another word processing software program, prepare a written report for the Board of Directors. The intended audience is clear from the salutation and the language used throughout the report.
  • Include a detailed and thorough explanation of the conclusion you reached regarding the feasibility of each proposal supported by the calculations prepared in Part 1.
  • Explain at least five non-financial items (e.g., culture, language, etc.), which may impact the perceived desirability of each location.
  • Select the one location you recommend the Board invest in. Explain your rationale in precise and detailed language.