Question: Online Chapter 13 Homework Sod Help 4 Problem 13.024: Calculate the number of ads per year to break even between two alterantives costs while considering

 Online Chapter 13 Homework Sod Help 4 Problem 13.024: Calculate the

Online Chapter 13 Homework Sod Help 4 Problem 13.024: Calculate the number of ads per year to break even between two alterantives costs while considering the time-value of money 2 points eBook An on-line commercial directory service must decide between composing the ads for its clients in-house or paying a production company to compose them. To develop the ads in-house, the company will have to purchase computers, printers, and a database management system at an estimated cost of $35,500 This equipment will have a useful life of 3 years, after which it will be sold for $3,500. The employee who creates the ads will be paid $69,000 per year. In addition, each ad will have an average cost of $13. Alternatively, the company can outsource development at a flat fee of $21 per ad. At an interest rate of 9% per year, how many ads must the company sell each year for the options to just break even? Hint Print References The number of ads the company must sell for the options to just break even is determined to be

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!