Spot on Jodie! Unfortunately, I learned that method after making the video. Definitely recommend using your method for solving this type of break-even fe question. Well done. 👍
If the firm already owns the current machine, shouldn't the $5000 initial cost of the current machine be ignored? I.e., the initial cost of investing in the new machine would be $12,000 (or $12,000 minus the salvage value of the current machine, which isn't given)?
Sir, how is the manufacturing cost per unit being considered as saving? The actually spend money for manufacturing the unir not receiving the money right?
For the sake of saving time on the FE exam, you could just write an equation and solve for x (ie. -5,000 - 15,000x = -12,000 - 9,000x) x=1.667 or 1.2
Spot on Jodie!
Unfortunately, I learned that method after making the video. Definitely recommend using your method for solving this type of break-even fe question. Well done.
👍
When I plug in x=1.2 i get 23000, and 22800. when i plug them in. Is that correct?
where do you get 9000?
@@5littlebeast $1.50/unit * 6000 units = 9000
If the firm already owns the current machine, shouldn't the $5000 initial cost of the current machine be ignored? I.e., the initial cost of investing in the new machine would be $12,000 (or $12,000 minus the salvage value of the current machine, which isn't given)?
Logically I would say you are right. I think I did a poor job when writing this question.
Sir, how is the manufacturing cost per unit being considered as saving? The actually spend money for manufacturing the unir not receiving the money right?
Can you please explain one of this including interest if its the case.