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Great Southern Consultants Group's computer system has been down several times over the past few months, as shown below.
Each time the system is down, the firm loses an average of $500 in time and service expenses. They are considering signing a contract for preventive maintenance. With preventive maintenance, the system would be down on average only 0.5 per month. The monthly cost of preventive maintenance would be $400 a month. Which is cheaper, breakdown or preventive maintenance?
Inventory
The total quantity of goods and materials a business holds for the purpose of resale or production.
Cost of Goods Sold
The total cost of manufacturing or purchasing the products a company has sold during a specific period.
Return Ratio
A measure of the profitability or effectiveness of an investment, calculating how much returns are gained relative to the investment's cost.
Common Stockholders' Equity
The portion of a company's equity that is attributable to the holders of its common stock.
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