Company XYZ is considering buying new power supply equipment, currently, there are two types of equipment under consideration: Type A: initial cost is $14,000, the salvage value is $2,000 after 4 years, the hourly cost is $.84/hour and the annual maintenance fee is $1,200; Type B: initial cost is $5,500, no salvage cost after 4 years, it requires hourly cost of $.67/hour and a human labor fee of $.8/hour. The interest rate is 10% compound annually, how many hours per year the equipment needs to be used to make two types break even?

Answer rating: 100% (QA)

Lets calculate the total cost for each type of equipment for a year For ... View the full answer