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Tiger Computers, Inc., of Singapore is considering the purchase of an automated etching machine for use in the production of its circuit boards. The machine
Tiger Computers, Inc., of Singapore is considering the purchase of an automated etching machine for use in the production of its circuit boards. The machine would cost $900,000 an additional $650,000would be required for installation costs and for software. Management believes that the automated machine would provide substantial annual reductions in costs, as shown below:
Annual Reduction in Costs | ||
Labor costs | $ | 240,000 |
Material costs | $ | 96,000 |
The new machine would require considerable maintenance work to keep it properly adjusted. The company
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