Constructing plant to manufacture proposed new product

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Reference no: EM131978319

A company is considering constructing a plant to manufacture a proposed new product. The land costs ?$300,000? the building costs $550,000? the equipment costs ?$300,000? and $150,000 additional working capital is required. It is expected that the product will result in sales of ?$750,000 per year for 12 ?years, at which time the land can be sold for $350,000?, the building for ?$350,000?, and the equipment for $50,000. All of the working capital would be recovered at the EOY 12. The annual expenses for? labor, materials, and all other items are estimated to total $475,000. If the company requires a MARR of 15?% per year on projects of comparable? risk, determine if it should invest in the new product line. Use the AW method.

The AW is $_______

Reference no: EM131978319

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