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A manufacturing company is considering a capacity expansion investment at the cost of $235136 with no salvage value. The expansion would enable the company to produce up to 33407 parts per year and the useful life of the additional capacity is seven years. Each part would generate $1.59 net profit and annual operating and maintenance costs are estimated at $28103 per year. The market demand for the parts is unlimited, all parts produced will be sold. The MARR of the firm is 10%.

The minimum annual production rate to make this investment justifiable is:

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92264892

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