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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
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 plant's five-year life. Each yard of carpet will produce a revenue of $2.00, and the plant's incremental operating expenses are expected to be $150,000 each year. Assume the expansion has no salvage value at the end of year five. The manufacturer's MARR is 18% per year. 13. What is the net cash flow generated every year? a. 150,000 b. 159,899 c. 650,000 d. 800,000 14. What is the minimum annual production rate to make the expansion a worthwhile investment? a. 103,400 yards b. 310,000 yards c. 154,944 yards d. 250,350 yards Show 15. Independent from the previous question, what is the maximum amount the company can invest for the expansion? a. 1,532,661 b. 3,250,661 c. 2,032,661 d. 1,586,661 6. (Repeated question for repeated scoring: Choose the same answer as you had in \#15.) Independent from the previous question, what is the maximum amount the company can invest for the expansion? a. 1,532,661 b. 3,250,661 c. 2,032,661 d. 1,586,661 (Repeated question for repeated scoring: Choose the same answer as you had in \#15.) Independent from the previous question, what is the maximum amount the company can invest for the expansion? a. 1,532,661 b. 3,250,661 c. 2,032,661 d. 1,586,661 previous question, what is the maximum amount the company can invest for the expansion? a. 1,532,661 b. 3,250,661 c. 2,032,661 d. 1,586,661 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 plant's five-year life. Each yard of carpet will produce a revenue of $2.00, and the plant's incremental operating expenses are expected to be $150,000 each year. Assume the expansion has no salvage value at the end of year five. The manufacturer's MARR is 18% per year. 13. What is the net cash flow generated every year? a. 150,000 b. 159,899 c. 650,000 d. 800,000 14. What is the minimum annual production rate to make the expansion a worthwhile investment? a. 103,400 yards b. 310,000 yards c. 154,944 yards d. 250,350 yards Show 15. Independent from the previous question, what is the maximum amount the company can invest for the expansion? a. 1,532,661 b. 3,250,661 c. 2,032,661 d. 1,586,661 6. (Repeated question for repeated scoring: Choose the same answer as you had in \#15.) Independent from the previous question, what is the maximum amount the company can invest for the expansion? a. 1,532,661 b. 3,250,661 c. 2,032,661 d. 1,586,661 (Repeated question for repeated scoring: Choose the same answer as you had in \#15.) Independent from the previous question, what is the maximum amount the company can invest for the expansion? a. 1,532,661 b. 3,250,661 c. 2,032,661 d. 1,586,661 previous question, what is the maximum amount the company can invest for the expansion? a. 1,532,661 b. 3,250,661 c. 2,032,661 d. 1,586,661
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