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A manufacturing company is considering investing in new technology to improve efficiency. The technology costs $2.5 million and is expected to reduce variable costs by
A manufacturing company is considering investing in new technology to improve efficiency. The technology costs $2.5 million and is expected to reduce variable costs by 20% and increase fixed costs by $400,000 per year. If the company produces and sells 400,000 units per year with variable costs of $15 per unit and fixed costs of $1 million per year, should the company invest in the new technology?
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