Limited is an engineering company that owns a non-working machine, which it wants to sell. The machine needs a replacement part before it can be sold. It is possible to buy the part for £687. This would take 9 hours to fit by one of the company's engineers who is paid £18 an hour. At present the company is short of work, but the owners are reluctant to lay off any engineers or even to cut down their basic working week because skilled labour is difficult to find and an upturn in work is expected soon.

The company paid £3,000 to buy the machine and without the part it could be sold for an estimated £3,500. What is the minimum price at which the company should sell the machine with the necessary part fitted?

 

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To determine the minimum price at which the company should sell the machine with the necess... View the full answer