​Use the Following Setup for Question

question 27

Multiple Choice

​Use the following setup for question
A cloth manufacturing firm is deciding whether or not to invest in new machinery.The machinery costs $45,000 and is expected to increase cash flows in the first year by $25,000 and in the second year by $30,000.The firm's current fixed costs are $9,000 and current marginal cost are $15.The firm currently charges $18 per unit.
-​A pottery craftsman is debating attending the crafters fair.It costs $50 to set up the booth and $20 in transportation to get his pottery to the fair.He nets $5 for each of his pieces,number of pots he must sell to make going to the fair worth the cost?

• A)​10
• B)12
• C)14
• D)​16

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Definitions:

Drought

An extended period of deficient rainfall relative to the statistical multi-year average for a region, resulting in water scarcity.

Tar Content

The amount of tar, a toxic substance, that is produced and released by burning products, such as cigarettes.

Normally Distributed

A balanced probability distribution around the mean, underscoring that events happening close to the mean are more common than distant events.

Low Tar

A term often used in tobacco product descriptions indicating a lower content of tar compared to regular products.