Question
In January of 2020, Ford Motor Corporation is going to announce their plans to start constructing a production facility in Kenya in the second quarter
In January of 2020, Ford Motor Corporation is going to announce their plans to start constructing a production facility in Kenya in the second quarter of 2020. It is expected that Ford will not begin selling cars and trucks in Kenya until the fourth quarter of 2021 (depreciation expense will not begin until the firm starts to utilize the assets in their operations). Along with the announcement to expand into Kenya, Ford announced their expectations of a very high return on invested capital from this investment opportunity. The project will be financed at the firm's current debt to asset ratio (wd) of around 25%. What is the likely impact of this decision for Ford's performance in fiscal year 2020? More specifically, explain your predicted impact on the following performance measures:
Operating Margin:
Operating Return on Assets:
Free Cash Flow:
Economic Value Added:
Total Shareholders' Return:
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