Order for the two processes to break even

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Reference no: EM131919568

Process A requires equipment with a first cost of 300,000 QAR having a salvage value of 100,000 QAR in 5 years. The fixed cost per year is 28,806 QAR with a variable cost of 200 QAR/unit. On the other side, Process B requires no purchase of equipment, but will involve a cost of 1,000 QAR/unit. Determine the number of units that must be manufactured per year in order for the two processes to break even. Use an interest rate of 5% per year and the AW relations as function of common variable for each alternative.

Reference no: EM131919568

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