Plymouth Corp

question 114

Multiple Choice

Plymouth Corp.sells units for $100 each.Variable costs are $75 per unit,and fixed costs are $200,000.If Plymouth leases a new machine,production will be more efficient,saving $5 per unit.If Plymouth plans to sell 12,000 units,at what lease cost will Plymouth be indifferent between leasing and not leasing the new machine?

• A)$10,000
• B)$40,000
• C)$60,000
• D)$80,000

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Definitions:

Interest

The cost of borrowing money or the return on investing capital, typically expressed as a percentage rate.

College Education

An advanced level of formal learning often pursued after high school, typically at a college or university.

Set Aside

To reserve or earmark funds or resources for a specific purpose, often used in legal, financial, or planning contexts.

Company Expansion

Strategies and actions undertaken by a company aimed at growing its business operations and market presence.