U.S. Steel is planning a plant expansion to produce austenitic, precipitation-hardened, duplex and martensitic stainless steel round bar (as well as various nickels) that is expected to cost $13 million now and another $10 million 1 year from now. If total operating costs will be $1.2 million per year starting 1 year from now, how much must the company realize in annual revenue in years 1 through 10 to recover its investment plus15% per year?
U.S. Steel is planning a plant expansion to produce austenitic, precipitation-hardened, duplex and martensitic stainless steel round bar (as well as various nickels) that is expected to cost $13 million now and another $10 million 1 year from now. If total operating costs will be $1.2 million per year starting 1 year from now, how much must the company realize in annual revenue in years 1 through 10 to recover its investment plus15% per year?
Chapter14: Capital Structure Management In Practice
Section14.A: Breakeven Analysis
Problem 8P
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U.S. Steel is planning a plant expansion to produce austenitic, precipitation-hardened, duplex and martensitic stainless steel round bar (as well as various nickels) that is expected to cost $13 million now and another $10 million 1 year from now. If total operating costs will be $1.2 million per year starting 1 year from now, how much must the company realize in annual revenue in years 1 through 10 to recover its investment plus15% per year?
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