To complete a project you can either buy a machine at the beginning of a 5 year period, or hire 5 employees at the begin
Posted: Sun Jul 03, 2022 1:02 pm
To complete a project you can either buy a machine at thebeginning of a 5 year period, or hire 5 employees at the beginningof a 5 year period. Employee costs (salary and benefits) are$5, 000 per employee at the end of each month for 5 years.Maintenance costs at the end of each month (including the lastmonth) are 1% of the machine price, and you can sell the machine atthe end of the 5 years for a total of $500, 000. What is themaximum price that it makes sense to pay for the machine ifeffective monthly interest is j = 0.3%