The BeanBean Corporation is considering the introduction of a bean salsa to the
ID: 2804718 • Letter: T
Question
The BeanBean Corporation is considering the introduction of a bean salsa to the market. You are an equity analyst and you are trying to estimate the value of this project to the company. You are aware of the following information. Which of the following is NOT relevant to determining whether to take the project?
BeanBean pays $24,500 per year in rent for their factory which currently operates below maximum capacity.
The introduction of bean salsa will cause sales of beany-guacamole to decline by $13 per year in each of the following years.
BeanBean will have to build several new production lines in the existing factory before the end of 2019, and the estimated capital expenditure will be $67,000.
Operating costs will be 1/3 of each year's revenues.
BeanBean expects the sales of the new product to be $92,000 in 2020
BeanBean pays $24,500 per year in rent for their factory which currently operates below maximum capacity.
The introduction of bean salsa will cause sales of beany-guacamole to decline by $13 per year in each of the following years.
BeanBean will have to build several new production lines in the existing factory before the end of 2019, and the estimated capital expenditure will be $67,000.
Operating costs will be 1/3 of each year's revenues.
BeanBean expects the sales of the new product to be $92,000 in 2020
Explanation / Answer
Statement 1 is not required
As this statment is not giving overall operating details
All the other statements are useful.
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