Two machines are being taken into consideration for the manufacturing of a selected component for which there's a protracted-term demand. Machine A value P50,000.00 and is anticipated to final three years and feature a P10,000 salvage value. Machine B expenses P75,000.00 and is anticipated to final 6 years and feature 0 salvage value. Machine A can produce a component in 18 seconds; Machine B calls for the simplest 12 seconds in step with the component. The out-of-pocket hourly value of the operation is P38.00 for A and P30.00 for B. Monthly Maintenance values is P200.00 for A and P220.00 for B. If the hobby on invested capital is 25%, decide the range of components in step with yr. at which the machines are similarly economical. If the anticipated range of components in step with yr. is extra than this break-even quantity, which gadget might be favored?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Two machines are being taken into consideration for the manufacturing of a selected component for which there's a protracted-term demand. Machine A value P50,000.00 and is anticipated to final three years and feature a P10,000 salvage value. Machine B expenses P75,000.00 and is anticipated to final 6 years and feature 0 salvage value. Machine A can produce a component in 18 seconds; Machine B calls for the simplest 12 seconds in step with the component. The out-of-pocket hourly value of the operation is P38.00 for A and P30.00 for B. Monthly Maintenance values is P200.00 for A and P220.00 for B. If the hobby on invested capital is 25%, decide the range of components in step with yr. at which the machines are similarly economical. If the anticipated range of components in step with yr. is extra than this break-even quantity, which gadget might be favored?

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