Basics Of Engineering Economy
2nd Edition
ISBN: 9780073376356
Author: Leland Blank, Anthony Tarquin
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Company E manufactures regulators at a labor cost of $90 per unit and material cost of $300 per unit. The fixed charges on the business are $15,000 per month and the variable costs are $20 per unit per month. If the regulators are sold to retailers at $600 each, how many units must be produced and sold per month to breakeven?
Evaluate a combined cycle power plant on the basis of the FW method when the MARR is 12% per year. Pertinent cost data are as follows :
Power Plant (thousands of $)
Investment cost
$13,000
Useful life
15 years
Market value (EOY 15)
$3,000
Annual operating expenses
$1,000
Overhaul cost—end of 5th year
$200
Overhaul cost—end of 10th year
$550
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In the breakeven analysis, fixed costs are constant. Over time these expenses can change. Give some examples of fixed costs that change over time.
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