Oriole Skateboards is considering building a new plant. Mark Al-Saigh, the company's marketing manager, is an enthusiastic supporter of the new plant. Betty Martin, the company's chief financial officer, is not so sure that the plant is a good idea. Currently, the company purchases its skateboards from foreign manufacturers. The following figures were estimated for the construction of a new plant: Cost of plant Annual cash inflows Annual cash outflows Estimated useful life Salvage value Discount rate $6,840,000 $6,840,000 $6,327,000 15 years $1,140,000 8% Mark believes that these figures understate the true potential value of the plant. He suggests that by manufacturing its own skateboards the company will benefit from a "buy Canadian" patriotism. He also notes that the firm has had numerous quality problems with the skateboards manufactured by its suppliers. He suggests that the inconsistent quality has resulted in lost sales, increased warranty claims, and some costly lawsuits. Overall, he believes sales will be $285,000 higher each year than projected above, and that the savings from lower warranty costs and legal costs will be $114,000 per year. He also believes that the project is not as risky as assumed above, and that a 6% discount rate is more reasonable.

Oriole Skateboards is considering buidding a new plant. Mark. Al-Saigh, the company/s marketing mansger, is an enthusiastic supporter of the new plant. Betty Martin, the company's chief financial officer, is not so sure that the plant is a good idea. Currently, the company purchases its skateboards from foreign manufacturers. The following figures were estimated for the construction of a new plant: Mark believes that these figures understate the true potential value of the plant. He suggests that by manufacturing its own skateboards the company will benefit from a "buy Canadian" patriotism. He ako notes that the firm has had numerous quality problems with the skateboards manufactured by its suppliers. He suggests that the inconsistent quality has resulted in lost sales. increased warranty claims, and some costly lawsuits. Overall, he believes sales will be $285,000 higher each year than projected above, and that the savings from lower warranty costs and legal costs will be $114,000 per year. He also believes that the project is rot as risky as assumed above, and that a 6% discount rate is more reasonable. Oriole Skateboards is considering buidding a new plant. Mark. Al-Saigh, the company/s marketing mansger, is an enthusiastic supporter of the new plant. Betty Martin, the company's chief financial officer, is not so sure that the plant is a good idea. Currently, the company purchases its skateboards from foreign manufacturers. The following figures were estimated for the construction of a new plant: Mark believes that these figures understate the true potential value of the plant. He suggests that by manufacturing its own skateboards the company will benefit from a "buy Canadian" patriotism. He ako notes that the firm has had numerous quality problems with the skateboards manufactured by its suppliers. He suggests that the inconsistent quality has resulted in lost sales. increased warranty claims, and some costly lawsuits. Overall, he believes sales will be $285,000 higher each year than projected above, and that the savings from lower warranty costs and legal costs will be $114,000 per year. He also believes that the project is rot as risky as assumed above, and that a 6% discount rate is more reasonable