A manufacturing company is considering a capacity expansion investment at the cost of $241,797 with no salvage value. The expansion would enable the company to produce up to 27,876 parts per year and the useful life of the additional capacity is seven years. Each part would generate $3.65 net profit and annual operating and maintenance costs are estimated at $28.137 per year. The market demand for the parts is unlimited, all parts produced will be sold. The MARR of the firm is 10%. The minimum annual production rate to make this investment justifiable is: Enter your answer in this form: 12345.67

A manufacturing company is considering a capacity expansion investment at the cost of $241,797 with no salvage value. The expansion would enable the company to produce up to 27,876 parts per year and the useful life of the additional capacity is seven years. Each part would generate $3.65 net profit and annual operating and maintenance costs are estimated at $28.137 per year. The market demand for the parts is unlimited, all parts produced will be sold. The MARR of the firm is 10%. The minimum annual production rate to make this investment justifiable is: Enter your answer in this form: 12345.67

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter17: Long-term Investment Analysis

Section: Chapter Questions

Problem 4E

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