Question: Two machines are under consideration for a new production Machine x costs $69,000 and is expected to have a salvage value of $6500 at the
Two machines are under consideration for a new production Machine x costs $69,000 and is expected to have a salvage value of $6500 at the end of its useful life of 6 years. It will have a fixed cost of $14,000 per year and a variable cost of $70 per unit per year. On the other hand, machine Y costs $74,000 and is expected to have a salvage value of $7000 at the end of its useful life of 8 years. It will have a fixed cost of $12, 500 per year and a variable cost of $73 per unit per year. Determine the quantity that must be produced for the two machines to break at an interest rate of 6% per year
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