Use the following information to answer question. A company is considering what size copying machine it should
Question:
Use the following information to answer question. A company is considering what size copying machine it should lease. The copier comes in three different sizes: small, medium, and large. A larger machine can handle more work, but it also costs more. The demand for the machine in the next year is uncertain. The cost of leasing a smaller machine is lower than the cost of leasing a larger one. However, at those times when the small machine could not handle the high demand, the company would have to lease a second machine and pay a significantly higher cost than if it had leased a larger machine in the first place.
The possible costs of leasing the three different copiers under conditions of low and high demand are presented in the following table.
Would you lease a medium-sized machine under any circumstances? Why or why not?
Step by Step Answer:
Statistics For Business And Financial Economics
ISBN: 9781461458975
3rd Edition
Authors: Cheng Few Lee , John C Lee , Alice C Lee