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If you expect to manufacture 1,000,000 units each year for the next 3 years, which machine would you purchase and why? Please show the math

image text in transcribedIf you expect to manufacture 1,000,000 units each year for the next 3 years, which machine would you purchase and why? Please show the math supporting your answer, including the total cost to run each machine for 3 years. Note: For this problem, you do not need to worry about NPV (assume the discount rate = 0%).

Your company has to decide which of four machines to purchase for a new production line you will be starting up. The one-time machine purchase price and installation cost, as well as the operating cost per unit manufactured, and the expected number of hours of downtime (requiring maintenance) for each machine are shown in the table below. Downtime costs $10,000 per hour (which includes repair and other costs). Machine Machine Operating Machine Installation Cost per Unit Purchase Price Cost Manufactured Machine A: $ 800,000 $ 100,000 $ 0.65 Machine B: $ 1,000,000 $ 200,000 $ 0.50 Machine C: $ 500,000 $ 300,000 $ 0.70 Machine D: $ 1,100,000 $ 200,000 $ 0.40 Expected Number of Hours of Downtime per year 60 80 50 85 Your company has to decide which of four machines to purchase for a new production line you will be starting up. The one-time machine purchase price and installation cost, as well as the operating cost per unit manufactured, and the expected number of hours of downtime (requiring maintenance) for each machine are shown in the table below. Downtime costs $10,000 per hour (which includes repair and other costs). Machine Machine Operating Machine Installation Cost per Unit Purchase Price Cost Manufactured Machine A: $ 800,000 $ 100,000 $ 0.65 Machine B: $ 1,000,000 $ 200,000 $ 0.50 Machine C: $ 500,000 $ 300,000 $ 0.70 Machine D: $ 1,100,000 $ 200,000 $ 0.40 Expected Number of Hours of Downtime per year 60 80 50 85

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