A manufacturing company is considering a capacity expansion investment at the cost of $32,850 with no salvage value. The expansion would enable the company to produce up to 30,000 parts per year and the useful life of the additional capacity is seven years. Each part would generate $2.54 net profit and annual operating and maintenance costs are estimated at $8,989 per year. The market demand for the parts is unlimited. All parts produced will be sold. The MARR of the firm is 10%. What is the minimum annual production rate to make this investment justified? Enter your answer as follows: 12345 Round your answer. Do not use a decimal point ("."), or a comma (",").
A manufacturing company is considering a capacity expansion investment at the cost of $32,850 with no salvage value. The expansion would enable the company to produce up to 30,000 parts per year and the useful life of the additional capacity is seven years. Each part would generate $2.54 net profit and annual operating and maintenance costs are estimated at $8,989 per year. The market demand for the parts is unlimited. All parts produced will be sold. The MARR of the firm is 10%. What is the minimum annual production rate to make this investment justified? Enter your answer as follows: 12345 Round your answer. Do not use a decimal point ("."), or a comma (",").
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![A manufacturing company is considering a capacity expansion investment at the cost of $32,850
with no salvage value. The expansion would enable the company to produce up to 30,000 parts per
year and the useful life of the additional capacity is seven years. Each part would generate $2.54
net profit and annual operating and maintenance costs are estimated at $8,989 per year. The
market demand for the parts is unlimited. All parts produced will be sold. The MARR of the firm
is 10%.
What is the minimum annual production rate to make this investment justified?
Enter your answer as follows: 12345
Round your answer. Do not use a decimal point ("."), or a comma (",").](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff9716e59-eff1-48fd-a19c-9a89b8a4cb69%2Fb7d595db-b462-4b6a-b304-e63a79299bb9%2Fflzfzaq_processed.jpeg&w=3840&q=75)
Transcribed Image Text:A manufacturing company is considering a capacity expansion investment at the cost of $32,850
with no salvage value. The expansion would enable the company to produce up to 30,000 parts per
year and the useful life of the additional capacity is seven years. Each part would generate $2.54
net profit and annual operating and maintenance costs are estimated at $8,989 per year. The
market demand for the parts is unlimited. All parts produced will be sold. The MARR of the firm
is 10%.
What is the minimum annual production rate to make this investment justified?
Enter your answer as follows: 12345
Round your answer. Do not use a decimal point ("."), or a comma (",").
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