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Ali bey has a small manufacturing firm at the Organize Sanayi. One of his customers asks him if he could make a new product, called
Ali bey has a small manufacturing firm at the Organize Sanayi. One of his customers asks him if he could make a new product, called abra-kadabra, for them. Ali bey thinks his company is capable of manufacturing abra-kadabra, but he needs to buy an abra-kadabra machine for production. He could buy the abra-kadabra machine from a US company, Expo Co. Expo Co. sells the machine for $10,000. The current exchange rate is $1 = 1,81 TL. The machine uses advanced technology and its variable cost of producing abra-kadabra is not linear, but it is a function of yearly production. If the yearly production is Q units, then the per unit variable cost is 5 - (Q / 1000) TL. Note that the variable cost is in TL, but the fixed cost is in US$. |
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