Question
Ski Boards, Inc., wants to enter the market quickly with a new finish on its ski boards. It has three choices: (a) refurbish the old
Ski Boards, Inc., wants to enter the market quickly with a new finish on its ski boards. It has three choices:
(a) refurbish the old equipment at a cost of $800,
(b) make major modifications at the cost of $1,100,
(c) purchase new equipment at a net cost of $1,800
If the firm chooses to refurbish the equipment, materials and labor will be $1.10 per board. If it chooses to make modifications, materials and labor will be $0.70 per board. If it buys new equipment, variable costs are estimated to be $0.40 per board.
On the graph, use the line drawing tool to draw the total cost curve for each option. Label the curves TCa, TCb, and TCc, respectively.
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