As an office manager, you want to choose from buying a copier or renting one. You can buy one for $7000 with a fee of $30 a mont
h or rent a copier machine for $100 per month. The cost of copying if you own one is 4 cents per copy and when you rent it, the cost is 8 cents per copy. You estimate that make 5000 copies per month. 1. Find a formula for the cost of copying when you own the machine by using the number of months as independent variable.
2. Find a formula for the cost of copying when you rent the machine where the number of months is represented by x.
3. Find the cost for each option for each year of the first 5 years.
4. Suppose you want to keep the copier machine for 8 years; which option is better for you? What about if you want to keep the same machine for 10 years?
5. After how many months would the cost of both options be the same?
6. Identify the number of months where neither owning or renting the machine holds a cost of ownership advantage.
7. What effect would the cost per copy have on cost of ownership? Graph or show hand calculations.
8. If you can sell the copier for 40% of its value at any time, how does the analysis change? Graph or show hand calculations.
