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RC Sport is considering producing the goal frame in its existing facility, instead of buying it from an external supplier. In order to make the

RC Sport is considering producing the goal frame in its existing facility, instead of buying it from an external supplier. In order to make the goal frames, it would need to buy a new machine. The machine would be expected to last 7 years, and sold for $8,000 at the end of year 7. Its annual maintenance and operating cost would be $50,000. RC would also need to buy $30 worth of material to produce each goal frame. The padding and netting would continue to be purchased from the same external supplier for the same price, and it would still cost $5 in labor cost to assemble one goal. Assuming RC Sport is able to produce and sell 10,000 hockey goals annually, what is the maximum purchase price of the machine that would make it economical for RC Sport to make the hockey goal frames internally? Use the annual worth method, assuming 15% MARR, and the Excel Goal Seek function to find the answer. Please make sure you save your Excel file after running Goal Seek, so that I can verify your file to make sure that you did use the Goal Seek function to arrive at your answer. (Do not use the trial and error, or another method.) Provide a written statement indicating the maximum economical price of the machine. Note: You will need to make up a purchase price of the machine to start with, which you can then override with the Goal Seek function.

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