2. Two alternatives for a carwash business include a fully automatic systems at an initial cost of$200,000 with annual operating costs of $24,000 and a semi automatic system with an initial costof $100,000 with annual operating costs of$36,000. The variable cost of each car wash is $2.5 for first alternative and $3.5for the second alternative. What is the point of indifference between these two alternatives?MARR=10% and both systems work for 10 years.

Answered: Image /qna-images/answer/50076367-5bc4-4c9a-b391-6d6ec4054afb.jpg

Answered: 2. Two alternatives for a carwash…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Initially, the contribution margin for a good is 74.94. If fixed costs are $1191 and an anticipated 588 units are being sold, how much can the price of the good drop before this business should shut down in the short run (assuming costs stay the same)? Answer:
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urrently, the unit selling price of a product is $410, the unit variable cost is $340, and the total fixed costs are $1,176,000. A proposal is being evaluated to increase the unit selling price to $460. a. Compute the current break-even sales (units).fill in the blank 1 of 1 units b. Compute the anticipated break-even sales (units), assuming that the unit selling price is increased and all costs remain constant.fill in the blank 1 of 1 units
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