A supermarket chain buys loaves of bread from its supplier at $0.50 per loaf. The chain is considering two options to bake its own bread.

Neither machine has a market value at the end of seven years, and MARR is 12% per year.

What is the minimum number of loaves that must be sold per year to justify installing Machine A instead of buying the loaves from the supplier?

(a) 7,506

(b) 22,076

(c) 37,529

(d) 75,059

(e) 15,637

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Machine A Machine B Capital investment Useful life (years) Annual fixed cost Variable cost per loaf $16,000 $8,000 $2,000 $4,000 $0.26 $0.16