Lincoln Manufacturing is considering starting a new line of business with the excess capacity it currently has on its production line. The current line is expected to last five years at the current rate of production. However, if a new line of business is taken on, then the production line will have to be replaced in three years instead of five. The new production line will last six years and would cost $100,000. What is the cost of taking on the new line of business? Round to the nearest dollar and assume a 7 percent cost of capital. $16,006 $33,132 $17,126 $20,980
Lincoln Manufacturing is considering starting a new line of business with the excess capacity it currently has on its production line. The current line is expected to last five years at the current rate of production. However, if a new line of business is taken on, then the production line will have to be replaced in three years instead of five. The new production line will last six years and would cost $100,000. What is the cost of taking on the new line of business? Round to the nearest dollar and assume a 7 percent cost of capital. $16,006 $33,132 $17,126 $20,980
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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