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Design 1 Design 2 Design 3 Design 4 Design 5 Fixed capital investment 12000 13000 15000 17000 19000 Sum of all op and fixed costs
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Design 1
Design 2
Design 3
Design 4
Design 5
Fixed capital investment
12000
13000
15000
17000
19000
Sum of all op and fixed costs per year
3500
3000
2600
2400
2100
A company must purchase one reactor to be used in an overall operation. Five reactors have been designed , all of which are equally capable of giving the required service . The following data apply to all five designs. If the company demands a 13 percent return on any unnecessary investment which of the five designs should be accepted and why. Show your calculations.
| Design 1 | Design 2 | Design 3 | Design 4 | Design 5 |
Fixed capital investment | 12000 | 13000 | 15000 | 17000 | 19000 |
Sum of all op and fixed costs per year | 3500 | 3000 | 2600 | 2400 | 2100 |
If the company demands a 13 percent return on any unnecessary investment which of the five designs should be accepted and why. Show your calculations.
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