Suppose there are two options to replace a broken yet critical machine. One is to buy a new CNC machine that has a fixed cost of $$500,000$ and a variable cost of $$4.$ The second option is to buy a used $5-$axis milling machine in pretty good shape that costs only $$20,000$ but the variable costs are $$10.$ If Marketing has determined low demand $=50,000$ units with probability $60\%$ and high demand of $150,000$ units with probability $40\%,$ which option should the company choose?

Question $32$Select one:

a$.$

The low demand option. It costs the company the least amount of money

b$.$

The high demand option. Higher demand is always better than low demand

c$.$

Option $1,$ the CNC machine is the most cost efficient option given Marketing's scenarios

d$.$

None of these answers is even close

e$.$

Option $2,$ the $5-$axis milling machine is the most cost effective option given Marketing's scenarios