A company determined to expand its existing capacity for the next three years. Assume the...
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Accounting
A company determined to expand its existing capacity for the next three years. Assume the demand for the next three years are 15, 30, and 60, respectively and the existing capacity is 8. The cost of capacity expansion is 100 + x2 where x is the amount of the capacity expanded (Note that if expansion is zero, then the cost is zero, NOT 100!).
Find the optimal capacity expansion plan for the next three years using discount rate of one.
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