question archive In less than three decades, China has become the second largest economy in the world
In less than three decades, China has become the second largest economy in the world
Subject:AccountingPrice: Bought3
In less than three decades, China has become the second largest economy in the
world. But this rapid growth has led to a lot of environmental and health issues.
These developments have placed environmental pollution at the top of the
government's reform agenda. Suppose that Sinochem Group, a large conglomerate
primarily engaged in production and trading of chemicals, fertilizer, and exploration
and production of oil, is considering building a large chemical factory near Huangpu
River. The NPV of that project is $20,000,000. This value does not include fines for
cleaning the river of the chemical waste from the factory, which might additionally
cost at least $3,000,000. On the other hand, the company may invest in a particular
filtering solution which reduces pollution to zero, but has a cost of $5,000,000.
Which solution would you choose if you were the CEO of the company? Justify your
choice.
