# Cost Benefit Analysis

(2) A company can manufacture a product with two different machines. Machine "A" has a $4.00 manufacturing cost per unit and a fixed cost of $3,000 for tools. Machine B costs $45,000 to purchase and has a $0.50 manufacturing cost per unit. With an annual anticipated volume of 7,000 units. The break-even point, in years, is most nearly?

(1) An automated measurement system has an initial cost of $36,000 and annual maintenance is $2,700. after 3 years the salvage value is $9,000. if the interest rate is 10%, the equivalent uniform annual cost is most nearly.

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#### Solution Preview

Please see answer in attached file

The breakeven point is where total costs equal total revenues. In the first case, we have a fixed cost of 3,000 and a variable cost of 4, in order to find the breakeven point we need the selling price. Subtract the variable cost from the ...

#### Solution Summary

The solution explains how to do a break-even analysis as also to calculate the uniform annual cost