Reference no: EM13850321

1. A plant is designed to produce 10,000 t/year of product. Total fixed capital investment is $1,250,000 and the plant operates about 8,400 h/yr. Working capital is 5% of annual sales revenue. It is a highly automated continuous process involving four processing steps. Plant overhead is 50% of labor payroll. Supervision cost is $20,000 per year. Repairs and maintenance cost is 10% of FCI for the first year and then increase by $15,000 each year. The plant life is 10 years and the company accountant uses the sumoftheyearsdigits method for depreciation. Salvage value of the plant is $0.0. Selling and distribution costs are $20 per ton of product. General overheads are 10% of sales revenue. Tax rate is 50%. Determine the value of Each ton of product requires.