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Determine the modification worth making

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A plant is producing 10,000 metric tons per year (10 kt/y or 10 kMTA) of a product. The overall yield is 70 wt% (0.7 kg of product per kg raw material). The raw material costs $500/metric ton, and the product sells for $900/metric ton. A process modification has been devised that will increase the yield to 75%. The additional investment required is $1,250,000, and the additional operating costs are negligible. Is the modification worth making?

Reference no: EM13884096

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