Should management purchase this equipment

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Reference no: EM132285803

A hamburger factory produces 50,000 burgers each week. The equipment costs $5,000 and will remain productive for three years. The annual labor cost is $8,000. a) What is the productivity as measured in units of output per dollar of input over a 3 year period? b) Management has the option of $10,000 equipment, with an operating life of five years. It would reduce labor costs to $4,000 per year. Should management purchase this equipment (using productivity arguments alone)?

Reference no: EM132285803

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