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Management of Plascencia Corporation is considering whether to purchase a new model 370 machine costing $360,000 or a new model 220 machine cong $340,000
Management of Plascencia Corporation is considering whether to purchase a new model 370 machine costing $360,000 or a new model 220 machine cong $340,000 to replace a machine that was purchased 7 years ago for $348.000. The old machine was used to make product ACL uns be our a week Unfortunately, the old machine cannot be repaired Management has decided to buy the new model 220 machine. It has less capacity than the new model 370 machine, but as capacity is suffe making product 1431 Management also considered, but rejected, the alternative of simply dropping product 143 if that were done, instead of evesting $340.000 the new machine, the money could be invested in a project that would return a total of $411,000. In making the decision to invest in the model 220 machine, the opportunity cost was
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