A concrete mixer has the following cash flow details;
Initial purchase price = 750000 birr
Annual operating and maintenance cost = 45000 birr
Salvage value = 210000 birr
Useful life = 10 years
In addition one operator is required to operate the concrete mixer at cost of 30 birr per hour. The production (preparation) rate of concrete of the mixer is 0.1 m3 per hour. The revenue to be generated from production of 1 m3 of concrete is 1000 birr. The interest rate is 11% per year. How many m3 of concrete need to be produced per year so that the revenue generated breakevens with the expenditure?

Answer rating: 100% (QA)

For finding out the breakeven value of the concrete volume in m3 per year th... View the full answer