Question
Suppose that in the year 2019, Oceanaire, Inc. planned to produce 500,000 units of its lightweight scuba tanks. Of the 500,000 it planned to produce,
Suppose that in the year 2019, Oceanaire, Inc. planned to produce 500,000 units of its lightweight scuba tanks. Of the 500,000 it planned to produce, a total of 50,000 units would be added to the inventory at its new plant in Arizona. Also, assume that these units have been selling at a price of $250 each and that the price has been constant over time. Suppose further that this year the firm built a new plant for $20 million and acquired $5 million worth of equipment. It had no other investment projects, and to avoid complications, assume no depreciation.
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