A firm has decided to manufacture biodegradable golf tees. These are two production processes available for consideration.
Assuming material and direct labor costs are the only variable costs and the MARR = 10% per year, over what range of annual production volume is Process A preferred. Assume repeatability.
Click the icon to view the pertinent data for each process.
Click the icon to view the interest and annuity table for discrete compounding when the MARR is 10% per year.
Process A is preferred if the annual production volume is
More Info
Process A Process B
Investment $20,000 $15,000
Operation and Maintenance Costs $15,000 $12,000
Material and Direct Labor Costs $0.14 $0.21
Salvage Value $4,000 $4,000
Useful Life 12 years 8 years
Print Done
tees/year. (Round to the nearest whole number.)
