At what production quantity per year would brewery be

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Reference no: EM13394538

A brewery is considering two potential production investments:

Option A costs an initial $2 million and will involve constant marginal cost of $5

option B costs an initial $4 million and will involve constant marginal cost of $3

In order to make the calculations simple, assume the annual capiital cost is 10% of the total investment. At what production quantity per year would the brewery be indifferent between these two investment opportunities?

A. 20000

B.100000

C. 200000

D. 150000

Reference no: EM13394538

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