Problem
You are the manager of a U.S. firm about to start a project in China. This project involves expanding manufacturing operations in China to sell in China and considering the possibility of sending part of the production to the United States or Canada.
a. Identify and explain two potential benefits this project might bring to the company.
b. Identify and explain two potential risks or disadvantages this project might create for the company.
If it is easier for you to select a product to be more specific about the benefits and risks, do so. For example, Tesla opening a manufacturing plant in China. To the extent possible, try to associate the benefits and costs with the effects on the project's cash flows or the discounting rate.