Purchase of new machine for an existing product line

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A company is considering the purchase of a new machine for an existing product line. The new machine will increase annual fixed costs from $3,720 to 7,905. The machine will increase the yearly production amount from 6,000 to 10,500 uits. Iw will reduce the average cost per unit from $.47/ unit to .43/ unite. Assuming that the company will sell everything that is produced and a sales price of 1.29/unit

should the company purchase the new machine?

Reference no: EM131633502

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