A company is considering constructing a plant tomanufacture a proposed new product. The land costs$300,000, the building costs $600,000, theequipment costs $250,000, and $100,000 additionalworking capital is required. It is expected that theproduct will result in sales of $750,000 per year for 10years, at which time the land can be sold for$400,000, the building for $350,000, the equipmentfor $50,000, and the working capital of $100,000 willbe recovered. The company is expecting to sell10,000 units of the product every year. The annualexpenses for labor, materials, and all other items areestimated to total $475,000. If the company requiresa MARR of 8% per year, determine the profit/unit ofthe new product.

in this we have to calculate net present value of product.

00,000, the building costs $600,000, the uipment costs $250,000, and $100,000 additiona rking capital is required. It is expected that the duct will result in sales of $750,000 per year for 1 ars, at which time the land can be sold for 00,000, the building for $350,000, the equipmen $50,000, and the working capital of $100,000 w recovered. The company is expecting to sell 000 units of the product every year. The annual benses for labor, materials, and all other items are imated to total $475,000. If the company requires MARR of 8% per year, determine the profit/unit of - new product.

00,000, the building costs $600,000, the uipment costs $250,000, and $100,000 additiona rking capital is required. It is expected that the duct will result in sales of $750,000 per year for 1 ars, at which time the land can be sold for 00,000, the building for $350,000, the equipmen $50,000, and the working capital of $100,000 w recovered. The company is expecting to sell 000 units of the product every year. The annual benses for labor, materials, and all other items are imated to total $475,000. If the company requires MARR of 8% per year, determine the profit/unit of - new product.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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