• S7.17
Markland Manufacturing intends to increase capacity by overcoming a bottleneck operation by adding new equipment. Two vendors have presented proposals. The fixed costs for proposal A are \$50,000, and for proposal B, \$70,000. The variable cost for A is \$12.00, and for B, \$10.00. The revenue generated by each unit is \$20.00.
•           a) What is the break-even point in units for proposal A?
•           b) What is the break-even point in units for proposal B?
• S7.18
Using the data in Problem S7.17:
•           a) What is the break-even point in dollars for proposal A if you add \$10,000 installation to the fixed cost?
•           b) What is the break-even point in dollars for proposal B if you add \$10,000 installation to the fixed cost?
• S7.30
What is the net present value of an investment that costs \$75,000 and has a salvage value of \$45,000? The annual profit from the investment is \$15,000 each year for 5 years. The cost of capital at this risk level is 12%.
• S7.31
The initial cost of an investment is \$65,000 and the cost of capital is 10%. The return is \$16,000 per year for 8 years. What is the net present value?