A $38,000 Coil Winding and Unwinding Machine Is Estimated to Provide

question 3

Essay

A $38,000 coil winding and unwinding machine is estimated to provide additional value to production by $15 per unit. When the machine is operated at 58 units per hour, it needs to be cooled down after 4 hours of operation and receive minor maintenance for 15 minutes. When the machine is operated at 118 units per hour, it needs to be cooled down after 5 hours of operation and receive minor maintenance for 30 minutes. The production line runs 8 hours per day. If each maintenance check costs $625 and the machine has a useful life of 80,000 hours of operations, at what speed should the machine should be operated?

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Definitions:

Recession

A period of economic decline across an economy lasting more than a few months, typically visible in GDP, real income, employment, industrial production.

Aggregate Supply

The overall quantity of products and services that companies in a country's economy intend to sell over a set duration.

Wealth Effect

The change in consumer spending and economic behavior that results from a change in perceived wealth, often due to asset price fluctuations.

Real Balances Effect

The change in consumption and savings behavior resulting from an alteration in purchasing power due to inflation or deflation.