Stryker sells medical devices, including PCBs. It is evaluating whether it should insource the production of PCBs. To insource, they would need to build a manufacturing facility, and sever ties with their suppliers. If Stryker decides to invoice, that will have multiple impacts on their financial situation. They would take a long term loan to build or buy a PCB factory. They can borrow money from a bank at 8%. All items on the IS/BS are in 1,000s.

1. What is Strykers current financial situation. From an Income Statement and Balance Sheet point of view?

2. What are the key financial metrics you would look at to compare the current plan with the insourcing plan?

3. Insourcing will require several financial changes. What are those financial changes? And what are reasonable assumptions as to how much they will change?

4. Assuming it will cost $6Billion to build a new PCB factory, what are the financials of this plan, and how does it compare with the current outsourcing plan? How does your answer change if that changes to $1B, or $10B?