Mighty Manufacturing sell 100,000 units of product A per annum. They are planning to purchase a new machine to improve the quality of their product. The improved product will sell for a $2 higher price. However, the additional electricity will increase the annual factory overhead costs $50,000.The machine is expected to have a life of 5 years. If the opportunity cost of funds is 7% per annum, what is the maximum price that Mighty Manufacturing should consider paying for the machine?

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