Question: Alpha Electronics can purchase a needed service for $190 per unit. The same service can be provided by equipment that costs $140,000 and that will

Alpha Electronics can purchase a needed service for $190 per unit. The same service can be provided by equipment that costs $140,000 and that will have a salvage value of 0 at the end of 10 years. Annual operating costs for the equipment will be $7,000 per year plus $25 per unit produced. MARR is 12%/year.Based on an annual

a)worth analysis, should the equipment be purchased if the expected production is 310 units/year?

Annual Worth?

b) Based on an annual worth analysis, should the equipment be purchased if the expected production is 530 units/year?

Annual Worth?

c) Determine the breakeven value for annual production that will return MARR on the investment in the new equipment.

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