Assume that you are offered a new piece of equipment for $10,000. The equipment will produce 10,000 units per year with a margin of $6.00 per unit. Demand for the product being produced has been 2,000 units per year. Your current equipment is fully depreciated and can produce the 2,000 units per year at but at a margin of only $4.00 per unit. Should you purchase or not purchase the new equipment and if so, under what conditions? 

Answer rating: 100% (QA)

a Margin earned by old equipment 4 per unit Margin earned by new eq... View the full answer