44. If an ammonia plant that produces 250 tons per year cost P120 million to construct 8 years ago, what should an 800 ton per year plant cost now? Suppose that the construction cost index has increased an average rate of 10% per year for the past eight years and that the cost capacity factor to reflect economy of scale is 0.75. O P670.70 million O P580.67 million O P710.87 million O P615.44 million

44. If an ammonia plant that produces 250 tons per year cost P120 million to construct 8 years ago, what should an 800 ton per year plant cost now? Suppose that the construction cost index has increased an average rate of 10% per year for the past eight years and that the cost capacity factor to reflect economy of scale is 0.75. O P670.70 million O P580.67 million O P710.87 million O P615.44 million

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter9: Capital Budgeting Techniques

Section: Chapter Questions

Problem 11PROB

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