Question
Bita overseas company is working on expansion decision , assume that the company is having 3 different alternatives of investment , to invest in plant
Bita overseas company is working on expansion decision , assume that the company is having 3 different alternatives of investment , to invest in plant A , the cost of initial investment (outflow) is $100000 and the expected returns (inflow ) $ 40000 per year for 4 years that are shown in the table below , OR to invest in plant B , the cost of initial investment (outflow) is $200000 and the expected returns (inflow ) $ 50000 per year for 4 years , OR to invest in plant C , the cost of initial investment (outflow) is $150000 and the expected returns (inflow ) $ 35000 per year for 4 years that are shown in the table below that are shown in the table below.......(3 marks)
REQUIRED
Which ALTERNATE would the management choose. Giving the following table:
Year | Plant A | Plant B | Plant C |
Investments | 100,000 | 200,000 | 150,000 |
1 | 40000 | 50000 | 35000 |
2 | 40000 | 50000 | 35000 |
3 | 40000 | 50000 | 35000 |
4 | 40000 | 50000 | 35000 |
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