Capital Project Budgeting and Rationing
Introduction
Consider:
(Trudell August 7, 2017).
… Tesla burned through a record $1.16 billion in cash in the second quarter, driven by spending on capacity for the Model 3 and boosting battery output … Tesla’s free cash flow widened to negative $1 billion in the first quarter from negative $277 million in the fourth quarter …
The company plans to reach its weekly goal of producing 5,000 Model 3 cars in two months, after revising the target several times. “We believe that Tesla is essentially learning how to become a manufacturing company on the fly,” said [an] RBC Capital Markets analyst.
The implicit assumption in the last sentence is that the overall problem of learning to become a manufacturing ...
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