-
Essay / How is “GreenWood Resources” trying to “succeed by doing...
Before entering the Chinese market, GreenWood Resources Inc. proposed two projects, Luxi and Dongji, but did not could decide which one. Thus, this required carrying out an analysis of their differences under the following aspects: economic, social and environmental. Economic Dimension: According to Exhibit 7, the initial investment in existing plantation assets of Luxi and Dongji was RMB 296,565,711 and RMB 100,298,995, respectively. Obviously, in terms of expenses, the Dongji project was much more attractive than Luxi. However, this could significantly change decisions in terms of the profitability of each project. For the first year, Luxi's planting expenditure was RMB 632/mu while Donji was RMB 255/mu. The variable cost of the Luxi project was 367+110=477 RMB/mu/year, while the cost of the Dongji project was 87+45=132 RMB/mu/year. Therefore, including the first year's expenses, Luxi costs a total of RMB 3,971/mu for 7 years, while Dongji costs RMB 1,575/mu for 10 years. To calculate revenue, Luxi could earn 12.6 × 559 = 7,043.4 RMB/mu, while Dongji could earn 8.0 × 445 = 3,560 RMB/mu. Then, the profit per year is equal to (Reve...