Question
Batman Traders is a South African based manufacturer of Generators, an award winning generator. The company is currently investigating two investment projects. Project A Involves
Batman Traders is a South African based manufacturer of Generators, an award winning generator. The company is currently investigating two investment projects.
Project A
Involves extending the company's production facility in Gauteng. The plant will cost R850 000 and is expected to create an additional annual profit of R120 000 for the 5 year life of the project.
The Following expenses were included in the annual profit :
Depreciation was calculated on the straight line method over the project.
Share of existing overheads, borne by the head office amounting to R50 000p.a
Additional fixed cost of R45 000.
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