The ABC company is considering constructing a plant to manufacture a proposed new product. The land costs P16,500, the building costs P32,000,000, the equipment costs P13,500,000, and P7,000,000 working capital is required. At the end of 12 years, the land can be sold for P27,000,000, the building for P12,500,000, the equipment for P270,000 and all of the working capital recovered. The annual disbursements for labor, materials, and all other expenses are estimated to cost P25,500,000. If the company requires a minimum return of 25%, what should be the minimum annual sales for 12 years to justify the investment? A. P54,768,343.67 B. P48,680,894.56 C. P74,897,345.69 D. P44,660,089.64
The ABC company is considering constructing a plant to manufacture a proposed new product. The land costs P16,500, the building costs P32,000,000, the equipment costs P13,500,000, and P7,000,000 working capital is required. At the end of 12 years, the land can be sold for P27,000,000, the building for P12,500,000, the equipment for P270,000 and all of the working capital recovered. The annual disbursements for labor, materials, and all other expenses are estimated to cost P25,500,000. If the company requires a minimum return of 25%, what should be the minimum annual sales for 12 years to justify the investment? A. P54,768,343.67 B. P48,680,894.56 C. P74,897,345.69 D. P44,660,089.64
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
Related questions
Question
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education