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FINANCIAL ACCOUNTING
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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Winter is nigh, and the USU-SSS (Sidewalk Safety Supervisor) asked you to recommend a snow removal plan: Plan A: Buy 4 snowblowers for a total of $30,000, with an operator for each at $40/day, and fuel and maintenance for each at $60/day. The machine's service life is 8 years with no salvage value. Plan B: Hire 20 student hand-shovelers who as a group can clear as much sidewalk as the machines for $30/student/day. If the interest rate on USU funds is 10%/year, the breakeven point between Plan A & B is closest to? O 11 20 28 O 42
Transcribed Image Text:Winter is nigh, and the USU-SSS (Sidewalk Safety Supervisor) asked you to recommend a snow removal plan: Plan A: Buy 4 snowblowers for a total of $30,000, with an operator for each at $40/day, and fuel and maintenance for each at $60/day. The machine's service life is 8 years with no salvage value. Plan B: Hire 20 student hand-shovelers who as a group can clear as much sidewalk as the machines for $30/student/day. If the interest rate on USU funds is 10%/year, the breakeven point between Plan A & B is closest to? O 11 20 28 O 42
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