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Minchanka [31]
2 years ago
10

Locke Inc has a machine that installs tires. The machine is now in need of repair. The machine originally cost $10,000 and the r

epair will cost $1,000, but the machine will then last two years. The labor cost of operating the machine is $0.50 per tire. Instead of repairing the old machine, Locke could buy a new machine at a cost of $5,000 that would also last 2 years; the labor cost would then be reduced to $0.25 per tire.
Required:
Should Williams repair or replace the machine if it is installing 10,000 tires in the next two years?
Business
1 answer:
Phoenix [80]2 years ago
5 0

Answer: William should replace the machine with a new one because over that 2 year span he will be losing less money, if he were to repair he would lose more money.

Explanation:

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