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BMW is considering transforming one its manufacturing plants into one that can be used to build electric cars. The plant in question has been operating
BMW is considering transforming one its manufacturing plants into one that can be used to build electric cars. The plant in question has been operating for many years. It has been built 5 years ago for $500 million, and over the last 5 years, BMW has invested an additional $150 million into it. Today, the plant is state of the art to build traditional cars, but it is not suitable to build and assemble electric cars. BMW could sell its plant to Volkswagen who continues to build traditional cars for $350 million. Alternatively, BMW can keep the plant, invest an additional $250 million to transform it and start building electric cars. If BMW choses to embark on its electric car journey with this plant, what is the appropriate amount to consider as the initial investment? a. $250 million O b. $650 million C. $600 million
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