Question
A company is proposed three different production lines. Production line A involves the purchase of a machine for 6,000$ by 4 years life and 1,800
A company is proposed three different production lines. Production line A involves the purchase of a machine for 6,000$ by 4 years life and 1,800 $ salvage value at that time. It is included additional cost of 0,2$ 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 0,32$ 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 8 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)
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