Ivey Publishing
PepsiCo Changchun Joint Venture: Capital Expenditure Analysis
Product Number:
9B00N016
Publication Date:
02/02/2001
Revised Date:
01/12/2010
Length:
15 pages (7 pages of text)
Product Type:
Case (Field)
Source:
Ivey
PepsiCo Inc. spanned more than 190 countries and accounted for approximately one-quarter of the world's soft drinks. The vice-president of finance for PepsiCo East Asia had been collecting data on the firm's proposed equity joint venture in Changchun, People's Republic of China (PRC). While PepsiCo was already involved in seven joint ventures in the PRC, this proposal would be one of the first two green-field equity joint ventures with PepsiCo control over both the board and day-to-day management. Every investment project at PepsiCo had to go through a systematic evaluation process that involved using capital budgeting tools such as new present value (NPV) and internal rate of return (IRR). He needed to decide if the proposed Changchun joint venture would meet PepsiCo's required return on investment. He was also concerned what the local partners would think of the project. The final decision would be made after a presentation to the president of PepsiCo Asia-Pacific.
Issues:
Disciplines:
Finance,  International
Industries:
Manufacturing
Setting:
China, Large, 1994
Intended Audience:
Undergraduate/MBA
Price:
$5.30 CAD / $5.00 USD Printed Copy
$4.50 CAD / $4.25 USD Permissions
$4.50 CAD / $4.25 USD Digital Download
Associated Materials
Use With: 9B00N016 (15 pages)
Supplements: 7B00N016 (161 KB)
Translations: Simplified Chinese (13 pages)
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