What would a 1,500,000-pound-per-year plant cost now

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If an ammonia plant that produces 500,000 pounds per year cost $2,500,000 to construct eight years ago, what would a 1,500,000-pound-per-year plant cost now? Suppose that the construction cost index has increased an average rate of 12 percent per year for the past eight years and that the cost-capacity factor (x) to reflect the economy of scale is 0.65.

Reference no: EM13199469

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