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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 $ The extra capacity will permit the company to produce yards of carpet each year during the plants fiveyear life. Each yard of carpet will produce a revenue of $ and the plants incremental operating expenses are expected to be $ each year. Assume the expansion has no salvage value at the end of year five. If the manufacturers MARR is per year, what is the minimum annual production rate to make the expansion a worthwhile investment?
a yards b yards c yards d yards
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