Demand for concave utility meters is expanding rapidly but, Ask an Expert

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Demand for concave utility meters is expanding rapidly, but the industry is highly competitive. A utility meter plant costs $50 million to set up, and it has an annual capacity of 500,000 meters. The production costs $5 per meter, and this cost is not expected to change. The machines have an indefnite physical life and the cost of capital is 10%. What is the competitive price of a utility meter?

a. $5

b. $10

c. $15

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92164356

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