A project will increase revenue from $1.7 million to $2.6 million. Wages are 40% of revenue. Maintenance on the machine will be $31,000 less than it is on the machine that will be replaced. What is the incremental net revenue (i.e. change in revenue minus expenses) that will result from accepting this project? a. $0.540 million b. $0.571 million c. $0.900 million d. $0.509 million
A project will increase revenue from $1.7 million to $2.6 million. Wages are 40% of revenue. Maintenance on the machine will be $31,000 less than it is on the machine that will be replaced. What is the incremental net revenue (i.e. change in revenue minus expenses) that will result from accepting this project? a. $0.540 million b. $0.571 million c. $0.900 million d. $0.509 million
Chapter10: Project Cash Flows And Risk
Section: Chapter Questions
Problem 8PROB
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7.1
A project will increase revenue from $1.7 million to $2.6 million. Wages are 40% of revenue. Maintenance on the machine will be $31,000 less than it is on the machine that will be replaced.
What is the incremental net revenue (i.e. change in revenue minus expenses) that will result from accepting this project?
a.
$0.540 million
b.
$0.571 million
c.
$0.900 million
d.
$0.509 million
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