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

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