Problem #$2$

Assumptions:

ABC Machine Corp. buys a specialty lathe for its metal products with an original equipment purchase price of $$42,560.$

The lathe has an estimated economic life of seven $(7)$ years and an assumed salvage value of $$1,540.$

Expected production over the economic life of the lathe is $726,000$ units in the following pattern:

Year $1=76,000$ units; Year $2=95,000$; Years $3-7=111,000$ units per year