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A company is trying to determine which computer system to install. SYSTEM A consists of a central minicomputer costing $100,000 plus desktop terminals costing $800 each. SYSTEM B is a network of desktop personal computers that costs $16,000 to install plus $1,200 for each desktop personal computer. How many desktop setups would the company need in order to make the costs of the two systems equal?

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Solution Summary

The solution is to determine which computer system to install. It gives out equations and calculations for break even point, indifference point and profitability calculations

Solution provided by:
Gaurav Agarwal, MS
Education
  • BE, Bangalore University, India
  • MS, University of Wisconsin-Madison
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