Case 20 aurora textile company
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Case 20 Aurora Textile Company. 1. Background Aurora was questioning whether it should install a new ring-spinning machine, Zinser 351 ($8.25 million) whose efficiency will reduce operating costs.

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Case 20 Aurora Textile Company

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Case 20 aurora textile company

Case 20 Aurora Textile Company


Case 20 aurora textile company

  • 1. Background

  • Aurora was questioning whether it should install a new ring-spinning machine, Zinser 351 ($8.25 million) whose efficiency will reduce operating costs.

  • But Aurora had losses last 4 years and limited cash ability and working capitals. Difficult financial environment is expected to go on in future.


Case 20 aurora textile company

  • 2. Questions

  • 1) Briefly summarize Text-Mill Industry.

  • 2) Does Aurora have to keep using the existing ring-spinning machine or purchase the Zinser?

  • (Using NPVand IRR, answer this question)

  • 3) Is it really best interest to shareholders in the changing environment – lifting quota (WTO) and in terms of liability risks associated with customer return?


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