(Answered) The demand for dvd players is expanding rapidly but the

Finance

The demand for DVD players is expanding rapidly, but the industry is highly competitive. A plant to make DVD players costs $40 million, has an annual capacity of 100,000 units, and has an indefinite physical life.

The variable production cost per unit is $20 and is not expected to change.

If the cost of capital is 10%, what is the price of a DVD player?

Plant 40,000,000

Annual Production Capacity 100,000

Production cost per unit 20

Cost of capital 10%

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