New equipment purchasing


Suppose which you are offered a new piece of equipment for $10,000. The equipment will produce 10,000 units per year with the margin of $6.00 per unit. Demand for product being produced has been 2,000 units per year. Your current equipment is completely depreciated and can manufacture the 2,000 units per year at but at a margin of only $4.00 per unit. Should you buy the new equipment? Under what situations?

Request for Solution File

Ask an Expert for Answer!!
Operation Management: New equipment purchasing
Reference No:- TGS013844

Expected delivery within 24 Hours