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A company can purchase a new kiln for firing ceramics for $18,000 now. This kiln will have a life of 6 years and a salvage
A company can purchase a new kiln for firing ceramics for $18,000 now. This kiln will have a life of 6 years and a salvage value of $2000. It costs the company 40 cents to fire a ceramic in the kiln. This company can also contract out the making of the ceramics, and that cost will be $3.00 for each ceramic. The interest rate is 15% per year. a) Plot the AE for each option as a function of the number of ceramics made per year. b) How many ceramics must this company make per year for these two options to be equivalent
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