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The ABC company is considering constructing a plant to manufacture a proposed new product.
The ABC company is considering constructing a plant to manufacture a proposed new product. The land costs P15,000,000, the building costs P30,000,000, the equipment costs P12,500,000 andP5,000,000 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 the working capital recovered. The annual disbursement for labor, materials, and all other expenses are estimated to cost P23,750,000. If the company requires minimum return of 255, what should be the minimum annual sales for 12 years to justify the investment?