Auto Shoppe is considering the purchase of a new engine computer code reader for $65,000. Auto Shoppe can charge $75 for the service of reading the codes from a single car engine, while the actual cost of the reading would be only $10 per car engine. a. For how many cars would Auto Shoppe need to read the engine computer codes to break even on this purchase? b. Suppose that the manager of Auto Shoppe is concerned about this purchase and has stated that if Auto Shoppe were to buy the new engine computer code reader, "the machine needs to pay for itself by the time we use it to read the codes of 200 car engines." The manager says this is because "those sorts of engine computer code readers go out of date very quickly, so if we don't get our money back soon, we will probably just wind up replacing the machine before it ever breaks even." What would Auto Shoppe need to charge for the service of reading each car engine, to break even when it reads the codes from 200 car engines?

Auto Shoppe is considering the purchase of a new engine computer code reader for $65,000. Auto Shoppe can charge $75 for the service of reading the codes from a single car engine, while the actual cost of the reading would be only $10 per car engine. a. For how many cars would Auto Shoppe need to read the engine computer codes to break even on this purchase? b. Suppose that the manager of Auto Shoppe is concerned about this purchase and has stated that if Auto Shoppe were to buy the new engine computer code reader, "the machine needs to pay for itself by the time we use it to read the codes of 200 car engines." The manager says this is because "those sorts of engine computer code readers go out of date very quickly, so if we don't get our money back soon, we will probably just wind up replacing the machine before it ever breaks even." What would Auto Shoppe need to charge for the service of reading each car engine, to break even when it reads the codes from 200 car engines?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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