Black Electronics is trying to reduce supply chain risk by making more responsible make-buy decisions through improved cost estimation. A high-use component can be purchased for $26 per unit with delivery promised within a week. Alternatively, they can make the component in-house and have it readily available at a material cost of $7 per unit, if equipment costing $150,000 is purchased. Labor and other operating costs are estimated to be $31,000 per year over the study period of 4 years. Salvage is estimated at 11% of first cost and interest is assumed to be 10% per year. Which of the following value is closest to the break-even quantity?

Select one:

a. 2,951

b. 3,148

c. 5,116

d.3,935