An investor has agreed to produce 100 waffles/day for a restaurant, which is willing to pay 5₺ for each waffle. A waffle machine is urgently required to begin production. Meanwhile, the investor quickly finds two waffle machines from a supplier. Each machine has an expected 1-year lifetime.Please demonstrate the break-even points for both options, separately.After producing for one-year, which option will lead to more profits?Waffle MachineTotal investment required before productionUnit Cost to produceNotes by the investorBrand: WiaomiEnergy Efficiency: Moderate10.0002this one costs less at the beginningBrand: RiemensEnergy Efficiency: High20.0001while using, this one should offer better energy efficiency

1) to break even we need to cover the initial cost + the unit cost to produce each wafflenow that…

Answered: An investor has agreed to produce 100…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter19: Capital Investment

Section: Chapter Questions

Problem 15E: Gina Ripley, president of Dearing Company, is considering the purchase of a computer-aided...

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An investor has agreed to produce 100 waffles/day for a restaurant, which is willing to pay 5₺ for each waffle. A waffle machine is urgently required to begin production. Meanwhile, the investor quickly finds two waffle machines from a supplier. Each machine has an expected 1-year lifetime.

Please demonstrate the break-even points for both options, separately.

After producing for one-year, which option will lead to more profits?

Waffle Machine

Total investment required before production

Unit Cost to produce

Notes by the investor

Brand: Wiaomi

Energy Efficiency: Moderate

10.000

this one costs less at the beginning

Brand: Riemens

Energy Efficiency: High

20.000

while using, this one should offer better energy efficiency

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