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Q. Assume that you are offered a new piece of equipment for $10,000. Equipment will produce 10,000 units per year with a margin of $6.00 per unit. Demand for product being produced has been 2,000 units per year. Your current equipment is fully depreciated and can produce 2,000 units per year at but at a margin of only $4.00 per unit. Should you purchase new equipment? Under illustrate what conditions?

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Operation Management, Management Studies

Category:- Operation Management
Reference No.:- M9309990

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