Produced per year to prefer the in-house option

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Reference no: EM131293243

CFD Engineering, Inc. is considering two options for obtaining parts that will be needed for the next ten years. The first option is to order the parts from a supplier for $90 per unit. The second option is to produce the parts in-house by purchasing equipment that costs $100,000 and will have no salvage value at the end of 10 years. Annual operating costs for the equipment will be $7,000 per year and materials will cost $25 per unit produced. MARR is 8% per year. How many units (X) would have to be produced per year to prefer the in-house option?

Reference no: EM131293243

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