Question: please can you solve question and consider the method which mention about at the end of the question.Thanks a lot To make an investment, a
To make an investment, a company has borrowed $8,000,000 annually for 10 years with 18% annual capital cost rate compounded monthly maturity. By this investment, (6)200,000 units per year will be produced. The amount of production will decrease by (4/3)% per year for the second 10 years after remaining constant for the first 10 years. The product willbe sold at a price of 3$/ unit. It is expected that annualescalationrate of the product sales price will be 16% in the first 10 years and 22% in the remaining years. 0.2kg of raw materials will be used for one unit product. The price of the raw material is 0.8$/kg. The annual escalation of the raw material price for the first 10 years is 15% and the second 10 years is 25%. A total of 80kW of electrical power will be consumed in the production system. The company will work (5,000+100(2)) hours per year. The electricity price is 0.8$/kWh. It hasbeen estimated that the annual escalationof the electricity price willbe 10% for the first 5 years, 15% for the second 5 years and 20% for the rest ofthetime. 10 personnel will work on the production system. The average monthly cost of a personnel is 7,000$ and its annual escalation is 18%. A large maintenance cost will be carried out every 5 years. The maintenance cost in the fifth year is 200,000S and the 5 -year escalation of this maintenance cost is 80%. Since the annual discount rate is 21%, determine the economic viability of this investment by the annual value method
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