A Company Is Currently Buying a Part at a Cost

question 30

Multiple Choice

A company is currently buying a part at a cost of $12 each. It is considering buying a machine that will produce the part at a variable cost of $8. Each unit of input produces the part plus a by-product, which is sold for $1. The machine will cost $40,000 and will have a useful life of 5 years. The company requires an 8% return. What annual volume is necessary to justify making the investment? Ignore income taxes.

• A) 2,558 units
• B) 3,198 units
• C) 12,792 units
• D) 8,000 units

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Listservs

Mailing list programs that distribute messages to subscribers on a particular topic, facilitating group communication and information sharing.

Virtual Spaces

Digital environments where individuals can interact, work, or create in an online setting, often using virtual reality or web-based platforms.

Self-help Group

A voluntary association of individuals who share a common problem or interest, working together to support each other and solve their problems.

American Self-Help Group Clearinghouse

An organization that provides information and support to self-help and mutual aid groups, facilitating connections and resources.