Question 1) ABC Co. are receiving a new type of product order from one of the valued customers. The customer says that daily demand is pretty large enough that all defect-free parts can be sold. Unfortunately, ABC Co. does not have any press machine which can produce this specific order. The condition is discussed with the customers and they gave a written guarantee to purchase all produced defect-free parts and the purchase price is 14 USD/part. The press machine information received is listed below:

Description	Machine X	Machine Y
Capital Investment	50.000 USD	60.000 USD
Useful Life	10 Years	10 Years
Production Rate	200 parts/hour	260 parts/hour
Hours available for production	9 hours/day	8 hours/day
Percent parts rejected	3%	9%
Material cost/item	6,00 USD	6,00 USD
Operator cost/hour	5USD	5 USD
Monthly working days	26	26
Maintenance Cost	300 USD/month	300 USD/month

1. Which machine should be selected? Please show all your calculations and explain briefly.
2. What would the percent of parts rejected have to be for Machine Y to be as profitable as Machine X? Please show all your calculations.