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4. A company is proposed three different production lines. Production line A involves the purchase of a machine for 6,000$ by 5 years life and
4. A company is proposed three different production lines. Production line A involves the purchase of a machine for 6,000$ by 5 years life and 1,800 $ salvage value at that time. It is included additional cost of 0,3$ per unit of product produced per year. The plan of production line B involves the purchase of a machine for 10,000$ with same life span of production line A with 2,500 salvage value at that time and additional cost of 0,22$ per unit of product produced per year. It is planned to purchase a machine for 8,600 $ for production line C with 2,000 salvage value when disposed of in 7 years and additional cost of 0,36$ per unit of product produced per year. For what range of annual production volume values is each method preferred? (i = 10%) (Break even Method). POINT:25
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