Question
XYZ Company just got a call for a large special order for their computer circuit boards.This company has requested a 20% discount since they will
XYZ Company just got a call for a large special order for their computer circuit boards.This company has requested a 20% discount since they will be ordering a large number at one time. The one issue is that they would like the circuit boards to be purple, rather than their typical green. This would require a special piece of equipment at a cost of $10,000 that may only be used once for this order. How should XYZ proceed?
A) They should evaluate their variable costs, space in their manufacturing facility and this additional fixed equipment cost and see if they will make a profit with the 20% discount.
B) They should take the order as it is large and will produce a large amount of income.
C) They should not take the order as the special equipment may only be used once, so it is not a good investment.
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