Question

In: Economics

U.S. Steel is considering a plant expansion to produce austenitic, precipitation hardened, duplex, and martensitic stainless...

U.S. Steel is considering a plant expansion to produce austenitic, precipitation hardened, duplex, and martensitic stainless steel round bars that is expected to cost $15 million now and another $10 million 1 year from now. If total operating costs will be $1.5 million per year starting 1 year from now, and the estimated salvage value of the plant is virtually zero, how much must the company make annually in years 1 through 8 to recover its investment plus a return of 16% per year?

The company must make $______ million annually in years 1 through 8 to recover its investment plus a return of 16% per year.

Solutions

Expert Solution

EUAC

= 15000000+10000000*(P/F,16%,1)+1500000*(P/A,16%,8)

= 15000000+10000000*0.862069+1500000*4.343591

= 15000000+8620689.66+6515386.34

= 30136076

= 30.13 million


Related Solutions

U.S. Steel is considering a plant expansion to produce austenitic, precipitation hardened, duplex, and martensitic stainless...
U.S. Steel is considering a plant expansion to produce austenitic, precipitation hardened, duplex, and martensitic stainless steel round bars that is expected to cost $13 million now and another $10 million 1 year from now. If total operating costs will be $1.5 million per year starting 1 year from now, and the estimated salvage value of the plant is virtually zero, how much must the company make annually in years 1 through 10 to recover its investment plus a return...
Explain the different regions of heat affected zone obtained in welding of Martensitic stainless steel (not...
Explain the different regions of heat affected zone obtained in welding of Martensitic stainless steel (not mild steel) Note: Kindly give the answer in details for Higher education assignment purpose.
Can someone tell me "what Electrochemical Factors affecting corrosion behaviour of austenitic stainless steel" ? and...
Can someone tell me "what Electrochemical Factors affecting corrosion behaviour of austenitic stainless steel" ? and a general explaination for each of the factor?
Can someone tell me "what Electrochemical Factors affecting corrosion behaviour of austenitic stainless steel" ? and...
Can someone tell me "what Electrochemical Factors affecting corrosion behaviour of austenitic stainless steel" ? and a general explaination for each of the factor?
Which technique is commonly used to produce 316L stainless steel? Why?
Which technique is commonly used to produce 316L stainless steel? Why?
To clean the impeller blades of a stainless steel tank, plant technicians pour 210.0 L of...
To clean the impeller blades of a stainless steel tank, plant technicians pour 210.0 L of a 240.0 g HNO3/L solution in a 820.0-L tank to soak. When the tank needed to be emptied, the tank was first filled with water entering at a rate of 1.90 L/s. (Figure 1). At t = tF, the tank is completely full of solution. At this point water continued to enter the tank at the same rate, but solution was also drained from...
Stainless Steel spoons are tested after manufacture with each test taking 10 minutes. If the plant...
Stainless Steel spoons are tested after manufacture with each test taking 10 minutes. If the plant makes 200,000 units a day and the quality Page 117-Sep-2018 assurance technologist recommends testing 1% of them to failure, is this sampling plan sensible? What would you recommend? Why?
The Clap Chemical Company needs a large insulated stainless steel tank to expand its plant. A...
The Clap Chemical Company needs a large insulated stainless steel tank to expand its plant. A recently closed brewery has offered to sell their tank for $15,000 delivered. The price is so low that Clap believes it can sell the tank at any future time and recover its $15,000 investment. Installing the tank will cost $9000 and removing it will cost $5000. The outside of the tank is covered with heavy insulation that requires considerable maintenance. This will cost $3500...
Suppose the U.S. is considering raising the tariff on Chinese steel. The steel industry is the...
Suppose the U.S. is considering raising the tariff on Chinese steel. The steel industry is the primary employer in the state of New Colombia. If a Senator from New Colombia votes to impose the tariff, does public interest theory or public choice theory better explain this behavior?
Question Set 3. A small manufacturing plant produces specialized stainless steel valves for high-pressure steam systems....
Question Set 3. A small manufacturing plant produces specialized stainless steel valves for high-pressure steam systems. Each valve costs $2000 to produce. The plant incurs $1,200,000 in fixed annual costs. The plant sells the valves directly to power plants for $6400 each. For this question set, use the following formulas: [Total Profit] = [Total Revenue] – [Total Cost] [Total Revenue] = [Production] x [Unit Revenue] [Total Cost] = [Production] x [Variable Unit Cost] + [Fixed Costs] 1. Create a data...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT