Install own interoffice telephone system for fixed cost

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Reference no: EM131056823

A small business can install its own interoffice telephone system for a fixed cost of $4,000 and a variable cost of $59.9 per telephone. The system will have a life of l0 years, no salvage value, and maintenance costs of $6 per phone per year. The telephone company will install a comparable system for a monthly charge of $l6.5 plus $3.39 for each phone. If the interest rate is 12% how many phones will be required to justify the privately owned system?

Reference no: EM131056823

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