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    Cost Benefit Analysis

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    (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