NUBD Co. is expanding its manufacturing plant, which requires an investment of P4 million in new equipment and plant modifications. NUBD’s sales are expected to increase by P2 million per year as are a result of the expansion. Cash investments in current assets average 30% of sales; accounts payable and other current liabilities are 10% of sales . What is the estimated total investments for this expansion?
NUBD Co. is expanding its manufacturing plant, which requires an investment of P4 million in new equipment and plant modifications. NUBD’s sales are expected to increase by P2 million per year as are a result of the expansion. Cash investments in current assets average 30% of sales; accounts payable and other current liabilities are 10% of sales . What is the estimated total investments for this expansion?
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter12: Capital Investment Decisions
Section: Chapter Questions
Problem 21BEA
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NUBD Co. is expanding its manufacturing plant, which requires an investment of P4 million in new equipment and plant modifications. NUBD’s sales are expected to increase by P2 million per year as are a result of the expansion. Cash investments in current assets average 30% of sales; accounts payable and other current liabilities are 10% of sales . What is the estimated total investments for this expansion?
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