3(please circle the final answer ) A manufacturing company is considering acapacity expansion investment at the cost of$255,695 with no salvage value. Theexpansion would enable the company toproduce up to 33,899 parts per year and theuseful life of the additional capacity is sevenyears. Each part would generate $1.76 netprofit and annual operating and maintenancecosts are estimated at $28,322 per year. Themarket demand for the parts is unlimited, allparts produced will be sold. The MARR of thefirm is 10%.The minimum annual production rate to makethis investment justifiable is:Enter your answer in this form: 12345.67

Solution 1)Consider the above given that Investment = $255695 Maintenance Cost =$28322 Net Profit…

Answered: The minimum annual production rate to…

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Economics

The minimum annual production rate to make this investment justifiable is:

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

3 (please circle the final answer )

A manufacturing company is considering a
capacity expansion investment at the cost of
$255,695 with no salvage value. The
expansion would enable the company to
produce up to 33,899 parts per year and the
useful life of the additional capacity is seven
years. Each part would generate $1.76 net
profit and annual operating and maintenance
costs are estimated at $28,322 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

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