Interglobal Paper Company has asked for your help in comparing its present computer system with a new one its board of directors would like to see implemented. Proposed system and present system costs are as follows:

a. Using break-even analysis, determine the year in which Interglobal Paper will break even.
b. Graph the costs and show the break-evenpoint.

Transcribed Image Text:

ltem Proposed System Costs Present System Costs Year 1 Equipment Lease Salaries Overhead Development $20,000 30,000 4,000 30,000 $11,500 50,000 3.000 Year 2 Equipment Lease Salaries Overhead Development $20,000 33,000 4,400 12,000 $10,500 55,000 3,300 Year 3 Equipment Lease Salaries Overhead Development $20,000 36,000 4,900 $10.500 60.000 3.600 Year 4 Equipment Lease Salaries Overhead Development $20,000 39,000 5,500 $10,500 66,000 4,000