It took MegaTech, Inc. 200,000 labor-hours to produce the first of several oil drilling rigs for Antarctic exploration. Your company, Natural Resources, Inc. has agreed to purchase the fifth oil drilling rig from their manufacturing yard. Assume that MegaTech experiences a learning rate of 75%. At a labor rate of $38 per hour, what should you, as the purchasing agent expect to pay for the fifth unit? T_N = T₁C, Where T_N = Time needed to produce the N_th unit.

Rate, labor/hr	$38
learning rate	0.75
T1= Time needed to produce the first unit	200,000
C5th=learning curve coefficient given, look for it in table.
TN
Total cost

Choose the correct answer(s)

a. C_5th =learning curve coefficient given (look for it in the table) is $0.513

b. T_5th is 102,600 hours

c. Total cost is $3,898,800

d. The hours needed for N_6th is more than 102,600