Machine A Machine B Capital investment Useful life (years) $8,000 $16,000 7 7 Annual fixed cost $2,000 $4,000 Variable cost per loaf $0.26 $0.16

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
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Chapter1: Making Economics Decisions
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A supermarket chain buys loaves of bread from its supplier at $0.50 per loaf. The chain is considering two options to bake its own bread. Neither machine has a market value at the end of seven years, and MARR is 12% per year. Use this information to answer (Select the closest answer), What is the minimum number of loaves that must be sold per year to justify installingMachine A instead of buying the loaves from the supplier? (a) 7,506 (b) 22,076 (c) 37,529 (d) 75,059 (e) 15,637. 

Machine A Machine B
Capital investment
Useful life (years)
$8,000
$16,000
7
7
Annual fixed cost
$2,000
$4,000
Variable cost per loaf
$0.26
$0.16
Transcribed Image Text:Machine A Machine B Capital investment Useful life (years) $8,000 $16,000 7 7 Annual fixed cost $2,000 $4,000 Variable cost per loaf $0.26 $0.16
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