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28 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
28 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. 1,333 b. 1,524 c. 1,850 d. 2,011
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