Assume that General Electric is trying to decide whether to locate a new production facility in the United States or in China. In order to help make its decision, the company wants to compare labor costs in the two countries. The average hourly wage in the United States is approximately $15 per hour. The U. S. exchange rate with China is 6.500 yuan per dollar. Convert the average U. S. hourly wage into units of yuan per hour

How should the environmental effects be dealt with when evaluating this project? the environmental effects should be ignored since the plant is legal without mitigation. the environmental effects should be treated as a sunk cost and therefore ignored. if the utility mitigates for the environmental effects, the project is not acceptable. however, before the company chooses to do the project without mitigation, it needs to make sure that any costs of "ill will" for not mitigating for the environmental effects have been considered in the original analysis. the environmental effects should be treated as a remote possibility and should only be considered at the time in which they actually occur. the environmental effects if not mitigated would result in additional cash flows. therefore, since the plant is legal without mitigation, there are no benefits to performing a "no mitigation" analysis.