Question: Consider the following two alternatives: Alternative 1 has a first cost of $ 3 2 5 , 0 0 0 , an annual maintenance and

Consider the following two alternatives:
Alternative 1 has a first cost of $325,000, an annual maintenance and operating cost of $20,575, and no salvage value. In addition, it requires two workers at a rate of $25/hour to output 5 units per hour.
Alternative 2 has an initial cost of $270,000, an annual maintenance and operating cost of $12,300, and a salvage value of $125,000. In order to produce 3 units in an hour, threeworkers are required a rate of $15/hour.
Given that the common parameter is "x units per year", what is the annual variable cost for Alternative 1?

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