Question: Alpha Electronics can purchase a needed service for $80 per unit. The same service can be provided by equipment that costs $120,000 and that will

Alpha Electronics can purchase a needed service for $80 per unit. The same service can be provided by equipment that costs $120,000 and that will have a salvage value of zero at the end of 10 years. Annual operating costs for the equipment will be $7,000 per year plus $20 per unit produced. MARR is 13.5%/year.

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What is the future worth of the equipment if the expected production is 200 units/year? $

What is the future worth of the equipment if the expected production is 500 units/year? $

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

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