Final project: powerco | Business & Finance homework help
The risks inherent in deciding to build the facility include cost overruns, market uncertainty, increased competition, and environmental concerns. Cost overruns can occur when unexpected expenses arise during construction which can lead to delays or even cancelled projects. Market uncertainty is another risk as changes in consumer demand or economic conditions could make it difficult for the facility to achieve its financial goals. Increased competition from other facilities in the area could also make it hard for the facility to maintain a competitive advantage and attract customers. Finally, there are potential environmental concerns such as air or water pollution that must be taken into consideration as well.
Each of these risks would affect the decision to build the facility by making it more difficult to determine whether or not building would be a sound investment. For example, higher costs due to cost overruns may outweigh any potential revenue gains while market uncertainty may make it difficult to accurately forecast future profits and losses. Similarly, increased competition may result in lower prices while environmental damage caused by the facility could lead to costly fines or legal action down the line.