Your company is planning to set up a new manufacturing, Operation Management

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Your company is planning to set up a new manufacturing

Your company is planning to set up a new manufacturing plant in China, the plant and its equipment cost $150M and estimated to have lifetime of 25 years. Straight line depreciation is to be used. Additional fixed cost per year is $5.5 million. Variable costs are $1.50 and price is set at $2.50.The CEO wants you to find out what the annual profit will be if (a) 10 million units (b) 8 million units are produced annually.

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