Question: 3) (20 Total points) (Two projects break even) A Yellow Pages directory company must decide whether it should compose the ads for its clients in

 3) (20 Total points) (Two projects break even) A Yellow Pages

3) (20 Total points) (Two projects break even) A Yellow Pages directory company must decide whether it should compose the ads for its clients in house or outsousce them to a production company. To develop the ads in house, the company will have to purchase computer at a cost of $12,000. The computers will have a useful life of 3 years, after which it will be sold for $2000. The employee who creates the ads will be paid $50 per hour and will generate 100 ads per 6 hours. In addition, each ad will have an additional cost of $5. Alternatively, the company can outsource ad development at a flat fee of $21 per ad. At an interest rate of 10% per year, how many ads must the company sell each year for the alternatives to break even

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