GENERAL INSTRUCTIONS: ENTER YOUR ANSWER AS A NUMBER WITHOUT A COMMA, ROUNDED TO THE WHOLE NUMBER, for instance if you compute

$77,342\mathrm{.}6478$ units then ENTER $77343$ AS YOUR ANSWER. DO NOT ROUND IN YOUR CALCULATION STEPS $($use calculator memory functions$)$ TO AVOID ROUNDING

ERRORS. There is a little bit of tolerance built into accepting$/$rejecting your answer, but if you round in your intermediate calculations you may be too far off.

Bikes$-$Are$-$Us$,$ Inc. produces bicycles. One of the parts it needs to produce a bicycle is pedals. The pedals are currently purchased from an external supplier for

$$177$ per unit. The company is considering to produce the pedals internally instead. To produce the pedals internally, it would need to acquire a machine for

$$47,000,$ which would be used for $7$ years and then scrapped, with no salvage value. The annual operating and maintenance cost of the machine is $$15,000.$ The

internal production would also result in variable cost of $$64$ per unit produced. Assume the MARR is $10\%.$ Calculate the annual number of units produced that

would result in the company being indifferent between buying the pedals externally and producing them internally $($In other words, calculate the annual breakeven

quantity of units produced$).($Hint: express the annual worth of cost of each alternative in terms of the number of units, equate, and solve for the number of units.$)$

Answer: