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Business, 20.12.2019 19:31 Cocco

Alpha electronics can purchase a needed service for 90 per unit. the same service can be provided by equipment that costs $100,000 and that will have a salvage value of zero at the end of 10 years. annual operating costs for the equipment will be $7,000 per year plus $25 per unit produced. marr is 12 percent/year. a. based on a future worth analysis, should the equipment be purchased if the expected production is 200 units/year? b. based on a future worth analysis, should the equipment be purchased if the expected production is 500 units/year? c. determine the breakeven value for annual production that will return marr on the investment in the new equipment.

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