Auto Shoppe is considering the purchase of a new engine computer code reader for $65,000. Auto Shoppe can charge S75 for the service of reading the codes from a single car engine, while the actual cost of the reading would only be $10 per car engine. Please answer the following two questions, based on this information. 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 The manager says this is because, “...those sorts of engine computer code readers go out of date very quickly, so if we don't get our money back soon, we will probably just wind up replacing the machine before it ever breaks even."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? O a. $45 Ob. $150 Oc. $205 d. $335 e. $75
Auto Shoppe is considering the purchase of a new engine computer code reader for $65,000. Auto Shoppe can charge S75 for the service of reading the codes from a single car engine, while the actual cost of the reading would only be $10 per car engine. Please answer the following two questions, based on this information. 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 The manager says this is because, “...those sorts of engine computer code readers go out of date very quickly, so if we don't get our money back soon, we will probably just wind up replacing the machine before it ever breaks even."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? O a. $45 Ob. $150 Oc. $205 d. $335 e. $75
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text: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 only be $10 per car
engine. Please answer the following two questions, based on this information. 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?
a. $45
b. $150
Oc. $205
d. $335
Oe. $75
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