Vicking Manufacturing Company is evaluating expanding their manufacturing facility. The expansion would cost $400,000 to construct, and it would have a 10% salvage value at the end of its 15-year useful life. The company's tax rate is 25% and has an 10% required rate of return. The company estimates that the following annual costs and revenues would be associated with the facilities expansion. Revenues Product sales price per unit $2 Sales Forecast 120,000 Expenses Maintenance 33,000 Salaries 132,200 Insurance 10,000 Total expenses 168,000 What is the ROI for the plant Expansion? Enter answer as a whole number. For example 5% would be entered as 5.

Vicking Manufacturing Company is evaluating expanding their manufacturing facility. The expansion would cost $400,000 to construct, and it would have a 10% salvage value at the end of its 15-year useful life. The company's tax rate is 25% and has an 10% required rate of return. The company estimates that the following annual costs and revenues would be associated with the facilities expansion. Revenues Product sales price per unit $2 Sales Forecast 120,000 Expenses Maintenance 33,000 Salaries 132,200 Insurance 10,000 Total expenses 168,000 What is the ROI for the plant Expansion? Enter answer as a whole number. For example 5% would be entered as 5.

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter9: Capital Budgeting Techniques

Section: Chapter Questions

Problem 12PROB

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