Question
The New Normal Co. is considering constructing a plant to manufacture proposed face mask products. The land costs P18,000,000, the building costs P25,000,000, the equipment
The New Normal Co. is considering constructing a plant to manufacture proposed face mask products. The land costs P18,000,000, the building costs P25,000,000, the equipment costs P12,000,000, and P4,500,000 working capital is required. At the end of 12 years, the land can be sold for P25,000,000, the building for P12,000,000, the equipment for P250,000 and all of the working capital recovered. The annual disbursements for labor, materials, and all other expenses are estimated to cost P23,750,000. If the company requires a minimum return of 25%, what should be the minimum annual sales for 12 years to justify the investment?
Find the minimum annual sales for 12 years to justify the investment
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