Basics Of Engineering Economy
2nd Edition
ISBN: 9780073376356
Author: Leland Blank, Anthony Tarquin
Publisher: MCGRAW-HILL HIGHER EDUCATION
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To make an item inhouse, equipement costing $245,000 must be purchased. It will
have a life of 4 years, an annual cost of $78,000, and each unit will cost $65 to
manufacture. Buying the item externally will cost $100 per unit. At i = 15% per year,
it is cheaper to make the item inhouse if the number produced per year is above
units.
Handheld fiber optic meters with white light polarization interferometry are useful for measuring temperature, pressure, and strain in electrically noisy environments. The fixed costs associated with manufacturing are $800,000 per year. If variable costs are $290 per unit and the company sells 4000 units per year, at what selling price per unit will the company break even?
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