Barriers To Exit
Categories: Company Management, Financial Theory
Pangaea Mechanical, a specialty machinery engineering firm, has spent a large amount of money on precision measuring and laser cutting equipment, which serve the specialized purpose of producing one of their machines. Due to technological innovations, it becomes more profitable to construct a different machine, which in turn requires different equipment. The previous equipment, however, hasn't been paid off yet, and the company still has a long ways to go before their initial costs on it are covered. Until they are, Pangaea simply won't have enough capital to afford halting production on their current machines.
They've got "Barriers to Exit."
