Forde Inc. is considering the production of a new product. There are 3 options to consider in the production process:

• Utilizing the existing machine with a variable cost of $52 per unit; fixed cost $14,000
• Upgrading the present machine with a variable cost of $40 per unit; fixed cost $18,750
• Adding a new machine with a variable cost per unit cost of $31; fixed cost $28,000

The organization is worried however, about the impact of competition. If competition occurs, they expect manufacture 3,500, 4,550, and 7,800 units respectively. Without competition, they expect to manufacture: 5,700, 6,550, and 8,925 units respectively.

At the moment their best estimate is that there is a 58% chance of competition. They will make their manufacturing decision based on the overall cost for each alternative.

Based on evaluating cost, determine the following:

a. What is the EMV if they utilize the current machine? [ Select ] ["$244,048", "$223,990", "$251,758", "$233,128", "$285,400"]

b. What is the EMV if they consider upgrading? [ Select ] ["$242,073", "$268,920", "$234,350", "$250,630", "$236,870"]

c. What is the EMV if they install a new machine? [ Select ] ["$279,240", "$301,672", "$284,448", "$297,276", "$275,892"]

d. Which decision should Forde Inc. make? [ Select ] ["either add a new machine or utilize the present machine based on EMV", "add a new machine", "upgrade the present machine", "add a new machine or upgrade the present machine", "utilize the present machine"]