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bpp text question 18

This topic has 1 reply, 2 voices, and was last updated 12 years ago by ashminder.

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June 13, 2012 at 9:06 pm #53434
jay14
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Hey! i have already asked the tutor..but just in case can somebody explain the solution to this P,I Question…i really dont understand how they worked out the initial investments in the text…
June 14, 2012 at 1:20 am #100816
ashminder
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hi actually initial investment = plant & machinery cost + working capital
and working capital =20% of annual sales value. for fiest inv A sales 30*150000=4500000 and 20%of this = 900000 plus plant cost = 2100,000 so total initial outlay = 3000000. hope it helps
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