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mariarad [96]
3 years ago
10

Kendra’s Quilts makes custom baby quilts embroidered with the baby’s name and date of birth. The company is considering the purc

hase of a new embroidery machine that costs $75,000. The increased efficiency of the new machine would allow the company to increase revenue by 50%, from $250,000 to $375,000 annually. Direct labor costs would increase by $15,000, and fixed costs (not including depreciation on the machine) would increase by $12,500. Factory rent is $12,000 per year. Should the company purchase the machine?
Business
1 answer:
maxonik [38]3 years ago
8 0

Answer:

They should purchase the machine.

Explanation:

Giving the following information:

The company is considering the purchase of a new embroidery machine that costs $75,000. The increased efficiency of the new machine would allow the company to increase revenue by 50%, from $250,000 to $375,000 annually. Direct labor costs would increase by $15,000, and fixed costs (not including depreciation on the machine) would increase by $12,500.

Effect on income= 125,000 - 75,000 - 15,000 - 12,500= $22,500

They should purchase the machine.

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Full Question

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1 year ago
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6 0
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Business Ethics are usually a reflection of the norms and cultures of the society they are based in. Think of it like this, if a company is based in a certain place and adheres to principles that are different from what is considered ethical in that society, do you think that company will be very profitable? I think not. Business Ethics are therefore based on General ethics with an immaterial difference.

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