SUBJECT: ENGINEERING ECONOMICS NOTES: 2 DECIMAL ONLY MUST BOX THE FINAL ANSWERS SOLUTIONS MUST BE CLEAR AND UNDERSTANDABLE MUST HAVE GIVEN, FORMULA TO BE USED, SOLUTIONS, ANSWER QUESTION: A food manufacturing company intends to manufacture a new product. However its present facilities are inadequate. On its present site, land is available for a new building costing P800,000 and the necessary equipment installed will cot P420,000. The building and equipment are expected to have a total salvage value of P360,000 at the end of 12 years. The average annual income from the new product is expected to be P550,000 and the annual disbursements for materials, labor and all other expenses are estimated to be P310,000. If the company requires a minimum return of 12% from this product, should it invest capital on the new product? Use the ROR method.
SUBJECT:
NOTES: 2 DECIMAL ONLY
MUST BOX THE FINAL ANSWERS
SOLUTIONS MUST BE CLEAR AND UNDERSTANDABLE
MUST HAVE GIVEN, FORMULA TO BE USED, SOLUTIONS, ANSWER
QUESTION:
A food manufacturing company intends to manufacture a new product. However its present facilities are inadequate. On its present site, land is available for a new building costing P800,000 and the necessary equipment installed will cot P420,000. The building and equipment are expected to have a total salvage value of P360,000 at the end of 12 years. The average annual income from the new product is expected to be P550,000 and the annual disbursements for materials, labor and all other expenses are estimated to be P310,000. If the company requires a minimum return of 12% from this product, should it invest capital on the new product? Use the ROR method.
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