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But ultimately we have agreed with Meyer’s separate hurdle rates. Reasons have proposed
below.
When there is a high-risk project, we shouldn’t put all our invest there itself it or
overinvest it in other words.
Food division has a low-risk portfolio.
Q5. What are the wholistic characteristics of the two divisions Food &
Instrument?
The food products division supplied a long-range of packaged and frozen products mainly
inclined to bakery throughout the USA. Revenues for this division was stable; the company
accomplished an average growth rate of 2% from 2010 till 2013. Instead of multiple efforts to
expand this unit but the sale remains mostly constant. Bread and Pretzel were the main
drivers of growth in this segment. However, customer feedbacks were constantly high for
product quality, freshness, and flavor.
On the other hand Instruments division showed steady growth from its inception.
20% of the division’s growth came from internally from the Chestnut’s product division.
Demand was being forecasted mainly from abroad, but it will require substantial investments
in Research & Development and fixed assets.