Ask Question, Ask an Expert

+61-413 786 465

info@mywordsolution.com

Ask Business Economics Expert

Das Auto is planning to start a new auto manufacturing plant in Medford, OR. The plant will cost $530 million to build and will cost $250,000 annually to maintain. The company can produce 17,000 cars annually of which only 12,000 will be sold every year. Each car sold will bring $12,000 in revenues for the plant. The remaining 5,000 cars will cost $0.75 per car per year, to hold and store, until they can be salvaged (cars must incur holding costs every year until they can be salvaged). Every fifth year, the company will salvage its unsold vehicles from the previous five years for a lump sum of $20 million. Given this information, calculate the ROR for the new plant for a planning horizon of 5 years and MARR of 11%. Should DAS auto fund this new plant? Hint: For ROR try 10% and 12%

Business Economics, Economics

  • Category:- Business Economics
  • Reference No.:- M92405131
  • Price:- $20

Priced at Now at $20, Verified Solution

Have any Question?


Related Questions in Business Economics

The following is historical data on the us dollar -

The following is historical data on the U.S. dollar - Canadian dollar exchange rate: date U.S./Canadian Canadian/U.S. 1/20/2016 0.68 1.46 9/6/2018 0.76 1.32 Which currency has appreciated over this period?

Fully explain at least one reason why many developing

Fully explain at least one reason why many developing countries suffered serious debt crisis in the early 1980s. Does this reason you explained in debt support Krueger & Srinivasan's argument? Why or why not? How could t ...

What is monetary approach in neoclassical economic theory

What is monetary approach in Neoclassical Economic Theory? How is poverty defined under the monetary approach? What are the two main reasons that cause poverty under Neoclassical Economic Theory? Briefly describe each on ...

Assume that the pizza market consists of two firms conans

Assume that the pizza market consists of two firms, Conan's and Pizza Hut. The price of a Conan pizza is denoted by Pc and the price of a Pizza Hut Pizza is P h.  Both sellers have a marginal cost of $5 for another pizza ...

Use the following table to find thenbspsteady-state values

Use the following table to find the? steady-state values of the? capital-labor ratio and output if the? per-worker production function is y t  = 2k t 0.3 . Saving rate (s) = 0.37 Depreciation rate = 0.04 population growt ...

Suppose a bond with no expiration date has a face value of

Suppose a bond with no expiration date has a face value of $10,000 and annually pays a fixed amount of interest of $900. a. In the table provided below, calculate and enter either the interest rate that the bond would yi ...

A coin is flipped five times in an experiment if x is the

A coin is flipped five times in an experiment. If x is the number of heads that turn out in the experiment, what is the set of possible values of variable x?

A recent survey found that 18 of all people 16 years of age

A recent survey found that 18% of all people 16 years of age and older do volunteer work. Suppose a random sample of 250 people 16 years of age and older is taken. What is the probability that more than 21% of the people ...

A car company claims that the mean gas mileage for its

A car company claims that the mean gas mileage for its luxury sedan is at least 24 miles per gallon. A random sample of 7 cars has a mean gas mileage of 23 miles per gallon and a standard deviation of 2.4 miles per gallo ...

A die is rolled four times what is the probability that the

A die is rolled four times. What is the probability that the sum of four numbers equals 13?

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Why might a bank avoid the use of interest rate swaps even

Why might a bank avoid the use of interest rate swaps, even when the institution is exposed to significant interest rate

Describe the difference between zero coupon bonds and

Describe the difference between zero coupon bonds and coupon bonds. Under what conditions will a coupon bond sell at a p

Compute the present value of an annuity of 880 per year

Compute the present value of an annuity of $ 880 per year for 16 years, given a discount rate of 6 percent per annum. As

Compute the present value of an 1150 payment made in ten

Compute the present value of an $1,150 payment made in ten years when the discount rate is 12 percent. (Do not round int

Compute the present value of an annuity of 699 per year

Compute the present value of an annuity of $ 699 per year for 19 years, given a discount rate of 6 percent per annum. As