Question # 5: Company X has been contracting its overhauling work to Company Y for $40,000 per machine per year. Company

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Question # 5: Company X has been contracting its overhauling work to Company Y for $40,000 per machine per year. Company

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Question 5 Company X Has Been Contracting Its Overhauling Work To Company Y For 40 000 Per Machine Per Year Company 1
Question 5 Company X Has Been Contracting Its Overhauling Work To Company Y For 40 000 Per Machine Per Year Company 1 (17.74 KiB) Viewed 17 times
Question # 5: Company X has been contracting its overhauling work to Company Y for $40,000 per machine per year. Company X estimates that by building a $500,000 maintenance facility with a life of 15 years and a salvage value of $100,000 at the end of its life, it could handle its own overhauling at a cost of only $30,000 per machine per year. What is the minimum annual number of machines that Company X must operate to make it economically feasible to build its own facility, assuming an interest rate of 10%?
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