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A carpet manufacturer in Georgia plans to expand its plant for a capital investment of $ 5 0 0 , 0 0 0 . The

A carpet manufacturer in Georgia plans to expand its plant for a capital investment of $500,000. The extra capacity will permit the company to produce 400,000 yards of carpet each year during the plants five-year life. Each yard of carpet will produce a revenue of $2.00, and the plants incremental operating expenses are expected to be $150,000 each year. Assume the expansion has no salvage value at the end of year five. If the manufacturers MARR is 18% per year, what is the minimum annual production rate to make the expansion a worthwhile investment?
(a)103,400 yards (b)310,000 yards (c)154,950 yards (d)250,350 yards

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