The capacity of a switchgrass-fueled ethanol plant is 100,000 gallons per month. Its capital investment is $600,000. Another design is being considered with a capacity of 40,000 gallons per month, and its capital investment is $300,000. Based on capital investment only, what is the cost-capacity factor for this technology?

Principles of Accounting Volume 2
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ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 5EA: If a garden center is considering the purchase of a new tractor with an initial investment cost of...
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The capacity of a switchgrass-fueled ethanol plant is 100,000 gallons per month. Its capital investment is $600,000. Another design is being considered with a capacity of 40,000 gallons per month, and its capital investment is $300,000. Based on capital investment only, what is the cost-capacity factor for this technology?

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