Sunar Factory: Investment Opportunity and a Financing Dilemma

摘要

This concise case, based on actual events, describes a dilemma facing Jawwad Karim, owner of the Sunar Jewelry Factory. After taking over his family's small manufacturing business in Saddar, Karachi, Karim chose to sell directly to customers rather than target his jewelry at large retailers. In May 2018, Karim decided to purchase an X-ray Fluorescence (XRF) Gold Testing Machine and offer the gold testing service to customers. Taking the first mover advantage, he expected to earn good returns on his investment; however, lacking personal savings, he had to consider external financing options. The case requires an investment analysis, assessment of qualitative, financial costs and benefits involved in different financing alternatives, and projection of future cash flows to identify the best financing alternative.