Merton$$s production manager suggests purchasing Model $101$ or Model $102$ engines from an outside supplier in order to relieve the capacity problem in the engine assembly department. If Merton decides to pursue this alternative, it will be effectively $$renting$$ capacity: furnishing the necessary materials and engine components, and reimbursing the outside supplier for labor an overhead.

$1.$ Should the company adopt this alternative?

$2.$ If so$,$ what is the maximum rent it should be willing to pay for a machine$-$hour of engine capacity?

$3.$ What is the maximum number of machine$-$hours it should rent?