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A company is considering adding 140 KW generator to their product lineup, where they just have produced a similar 80 KW generator at the cost
A company is considering adding 140 KW generator to their product lineup, where they just have produced a similar 80 KW generator at the cost of $16 million. From past experience the company recognizes the Economy of Scale Exponent of m=0.60 Question a: Provide a cost estimate of the 140 KW generator question b: if the company is also considering postponing the introduction of the new generator for five years, knowing that the current cost inflation index of 150 would likely reach 275 in five years, the company is also considering the addition of automatic control and sound control features that would cost $3 million at that time; estimate the expected future cost of the new generator
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