Companies that have a high demand for making coples, both color and black and white, often choose to lease a high$-$end copler that

provides fast and reliable service at a reasonable cost. The lease is usually for $3$ to $5$ years, and the cost to the user is $$0\mathrm{.}19$ per page

for black$-$and$-$white copies and typically $$0\mathrm{.}265$ per page for color coples. These are the terms of your current $3-$year lease contract

with Ricoh Company, which is up for renewal this month; the lease terms are expected to be the same for the next $3$ years, if renewed.

Hewlett$-$Packard Company $($HP$)$ developed an innovative copler that can reduce the cost of color coples. The copler measures exactly

how much color is used in a color copy so that the price of the copy can be determined by the amount of color used rather than a fixed

price per page. The cost could be as low as $$0\mathrm{.}251$ per page for a color copy. HP calls this a "flexible$-$pricing" approach. Assume for

this example that the cost of the leased copler $(3-$year lease$)$ is only the per$-$page charge$-$the initial lease cost Is negligible, and the

service costs would not differ between the HP copler and the copler you are using now.

Your company is an advertising agency, Tanner and Jones LLC$,$ and the quality of the color coples is critical to your business success.

The ability to rely on the copier at any time is also very important because some customer requests require urgent attention. You

believe that the RIcoh and HP printers are of the same reliability, but you have not had experience with the HP copier to be sure of the

copy quality. The demonstration of the HP copier has shown as good or better copy quality, but you have not had $3$ years' experlence

with it to know what it would be like day$-$to$-$day.

Required:

Assume that your company is considering the lease of one of these HP coplers, and you expect that the average price for a color

copy for your company would be $$0\mathrm{.}251$ because you would carefully prioritize color copy jobs and reduce the number of coples

requiring a large amount of color. You expect that training your copy center staff to properly use the new copier would cost about

$$4,368$ for materlals and lost work time. What is the breakeven number of color copies per year that would make you Indifferent

between the new HP copler and your current copier? $($Round your answer up to the nearest whole number.$)$

As in requirement $1,$ assume you expect that your per$-$copy cost for color coples with the HP copler will be $$0\mathrm{.}251,$ the training costs

are $$4,368,$ and you expect to make $270,000$ coples per year for the next $3$ years. In your negotiations with Ricoh concerning the new

lease and the cost of color coples, what price would you bargain for? $($Round your answer to $4$ decimal places.$)$