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B Company normally runs at capacity and the Model CY1000 machine is the company's production constraint. Management is considering purchasing a new machine, Model CZ4000
B Company normally runs at capacity and the Model CY1000 machine is the company's production constraint. Management is considering purchasing a new machine, Model CZ4000 and selling the CY1000. The CZ4000 is more efficient and can produce 20% more units than the old one. If the new machine is purchased, there should be a reduction in maintenance costs. The company will need to borrow money in order to purchase the CZ4000. The increase in volume will require increases in fixed selling expense, but general administrative expenses will remain unchanged. Shipping cost is a relevant expense. Question 2 options: True Or false
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