1) To make an item in-house, equipement costing $250,000 must be purchased. It will have a life of 4 years and no salvage value. The annual cost of the equipment is $80,000 and each unit will cost $40 to manufacture. Buying the item externally will cost $100 per unit. At an interest rate of 15% per year, it is cheaper to make the item in-house if the number per year needed is:

a)	Above 1047 units
b)	Above 2793 units
c)	Below 1047 units
d)	Below 2793 units

2) A company is considering two methods for obtaining a certain part. Method A will involve purchasing a machine for $50,000 with a life of 5 years, a $2,000 salvage value and a fixed annual operating cost of $10,000. Additionally, each part produced by the method will cost $10. Method B will involve purchasing the part from a subcontractor for $25 per part. At an interest rate of 10% per year, the number of parts per year required for the two methods to break even is:

a)	1033
b)	2011
c)	1850
d)	1524

3) A used bulldozer with a remaining life of 5 years and $10,000 salvage value can be purchased for $40,000. The annual maintenance cost is expected to $20,000 per year. In addition, operating costs are expected to be $25 per hour. Alternatively, a bulldozer can be rented for $150 per hour. At an interest rate of 10% per year, the minimum number of hours per year the bulldozer must be utilized to justify its purchase is closest to:

a)	460
b)	730
c)	231
d)	310

4) A toy manufacturing company has a capacity of 300,000 units annually. The fixed cost of the production line is $200,000 per year with a variable cost of $4 per unit and revenues of $7 per unit. The percent of capacity that must be utilized for the company to breakeven is closest to:

a)	46
b)	31
c)	22
d)	39