If the company requires a minimum return

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Reference no: EM1321321

Q. An ABC Company is considering constructing a plant to manufacture a proposed new product. The ground costs P15000000 the building costs P30000000 the equipment costs P12500000 also P5000000 working funds is required. At the end of 12 yrs the ground can be sold for P25000000 the building for P12000000 the equipment for P250000 also all of the working funds recovered. The yrly disbursements for worker, materials also all other expenses are estimated to cost P23750000. If the company requires a minimum return of 25%, illustrate what should be the minimum yrly sales for 12 yrs to justify the investment?

Reference no: EM1321321

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