USEC case study - Why is USEC pursuing the ACP Briefly discuss USECs business and what advantages would ACP bring to the table As per the case we have

USEC case study - Why is USEC pursuing the ACP Briefly...

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Why is USEC pursuing the ACP? Briefly discuss USEC’s business and what advantages would ACP bring to the table. As per the case we have given USEC enrichment process at the Paducah plant uses large amounts of electricity due to its gas-diffusion technology. This cost has been manageable because of a long term contract with power suppliers. But the recent contract expiration has caused an increase in gas-diffusion process, also there was a significant increase in the global energy prices during the past several years as had the prices for uranium and SWU (Separative Work Units) which made USEC to look into other options. Since the USEC started looking for an increase in the profitability of uranium enrichment, the massive capital expenditure project known as ACP (American Centrifuge Project) was an attempt by USEC to leapfrog over the technology of its competitors. USEC expected the cost efficiencies of the new technology to position it as a low-cost producer in the enrichment industry; however, this advantage comes at a high cost, which is expected to be $1.7billion over
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  • Spring '17
  • gleim
  • Business, Weighted average cost of capital, Enriched uranium, usec, USEC enrichment process

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