A factory produces 40,000 hamburgers each week. The equipment used cost $5,000 and will remain productive for 3 years. The labor cost per year is $8,000.
What is the productivity measure of "units of output per dollar of input" averaged during the 3 year period? (Show calculations).
There is an option of new equipment that cost $10,000, with an operating life of 5 years. It would reduce cost to$4,000 per year. Based on productivity measurement, should the company get the new equipment? (Show calculations)