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entury Foods, a producer of frozen meat products, is considering a new plant near Essen, Germany, for its sausage rolls and frozen meat pies. The company has estimates of production costs and selling prices in the first year. It expects the real value of perating costs per unit to fall because of improved operating methods. It also expects competitive pressures to cause the real value of product prices to fall. The following data are available. Answer parts (a) through (d). Century Food Plant Data Output price in 2021 (E/unit) 21 16.5 Operating cost in 2021 (€/unit) Planned output rate (boxes/year) Fall in real output price Fall in real operating cost per box First cost in 2020 (€) Study period Current euro MARR before tax 279,000 1.5% per year 1% per year 7,300,000 10 years 20% Accume there is zero inflatio 2020 of the project? LIse spreadsheet to find the nresent worth oresent worth

entury Foods, a producer of frozen meat products, is considering a new plant near Essen, Germany, for its sausage rolls and frozen meat pies. The company has estimates of production costs and selling prices in the first year. It expects the real value of perating costs per unit to fall because of improved operating methods. It also expects competitive pressures to cause the real value of product prices to fall. The following data are available. Answer parts (a) through (d). Century Food Plant Data Output price in 2021 (E/unit) 21 16.5 Operating cost in 2021 (€/unit) Planned output rate (boxes/year) Fall in real output price Fall in real operating cost per box First cost in 2020 (€) Study period Current euro MARR before tax 279,000 1.5% per year 1% per year 7,300,000 10 years 20% Accume there is zero inflatio 2020 of the project? LIse spreadsheet to find the nresent worth oresent worth

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Century Foods, a producer of frozen meat products, is considering a new plant near Essen, Germany, for its sausage rolls and frozen meat pies. The company has estimates of production costs and selling prices in the first year. It expects the real value of operating costs per unit to fall because of improved operating methods. It also expects competitive pressures to cause the real value of product prices to fall. The following data are available. Answer parts (a) through (d). Century Food Plant Data Output price in 2021 (€/unit) 21 Operating cost in 2021 (€/unit) 16.5 Planned output rate (boxes/year) Fall in real output price 279,000 1.5% per year Fall in real operating cost per box First cost in 2020 (€) 1% per year 7,300,000 10 years Study period Current euro MARR before tax 20% a. Assume there is zero inflation. What is the present worth, in 2020, of the project? Use a spreadsheet to find the present worth. The present worth of the project under the assumption of zero inflation is €
Transcribed Image Text:Century Foods, a producer of frozen meat products, is considering a new plant near Essen, Germany, for its sausage rolls and frozen meat pies. The company has estimates of production costs and selling prices in the first year. It expects the real value of operating costs per unit to fall because of improved operating methods. It also expects competitive pressures to cause the real value of product prices to fall. The following data are available. Answer parts (a) through (d). Century Food Plant Data Output price in 2021 (€/unit) 21 Operating cost in 2021 (€/unit) 16.5 Planned output rate (boxes/year) Fall in real output price 279,000 1.5% per year Fall in real operating cost per box First cost in 2020 (€) 1% per year 7,300,000 10 years Study period Current euro MARR before tax 20% a. Assume there is zero inflation. What is the present worth, in 2020, of the project? Use a spreadsheet to find the present worth. The present worth of the project under the assumption of zero inflation is €
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