A Company Needs to Purchase Several New Machines to Meet

question 70

Essay

A company needs to purchase several new machines to meet its future production needs. It can purchase three different types of machines A, B, and C. Each machine A costs $80,000 and requires 2,000 square feet of floor space. Each machine B costs $50,000 and requires 3,000 square feet of floor space. Each machine C costs $40,000 and requires 5,000 square feet of floor space. The machines can produce 200, 250 and 350 units per day respectively. The plant can only afford $500,000 for all the machines and has at most 20,000 square feet of room for the machines. The company wants to buy as many machines as possible to maximize daily production.
​
Formulate the LP for this problem.

Identify the criteria that must be met for a lease to be categorized as a capital lease for accounting purposes.

Comprehend the financial and tax advantages of choosing leasing over purchasing.

Analyze the factors included in a lease-purchase analysis.

Understand the impact of a bargain purchase option on the classification and advantages of a lease.

---

Definitions:

Expression

A combination of numbers, variables, operators, and sometimes parentheses that represents a value or quantity.

Decimal Notation

A way of expressing numbers that uses a decimal point to separate the whole part from the fractional part.

Expression

A combination of symbols and numbers that represent a mathematical operation or relation.

Difference

The result of subtracting one number from another, or the operation of subtraction itself.