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27 The following data apply to the next two questions. a One of Montreal's plants sells a custom product at $1,650, with a per unit
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The following data apply to the next two questions. a One of Montreal's plants sells a custom product at $1,650, with a per unit cost of $1,400. The plant manager has two suggestions to increase production by 500 units per year. In the first option, the engineering team has submitted a proposal to install new machinery for an additional $500,000. Assuming straight-line method with zero salvage value and 10 years useful life. The second choice is to use the plant's existing equipment but hire an additional person at $30,000 per year. The cost of capital is 11%. Assume a tax rate of 33 %. 27 of 40 Marks What is the EVA of the first option? O A $5,430 OB. $4,370 OC -$4.750 OD. -$5,300 O E None of the above Unsure Step by Step Solution
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