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Question : A manufacturer of an inspecting and profiling web controller has a fixed cost of $83,000 : 2141824

**SHORT ANSWER. Write the word or phrase that best completes each statement or answers the question.**

**Answer the question.**

1) A manufacturer of an inspecting and profiling web controller has a fixed cost of $83,000 per year and variable costs of $60 per unit produced. If the product is sold at $90 per unit, determine the breakeven quantity per year for the company.

2) Cougar Telemarketing is considering establishing a call center. The initial cost will be $2,750,000 with a $27,500 market value any time within a 13-year period. The fixed cost of the center will be $830,000 per year with an average variable cost of $3.00 per call. Cougar expects to generate revenue of $5.25 per call with a capacity of 110,000 calls for the first year. The company also expects to increase the capacity uniformly each year. At an interest rate of 2% per year, determine the uniform amount the capacity must increase each year so that the company can recover its investment in 3 years.

3) Two processes are under consideration for a certain production. Process A requires acquisition of a new machine that is estimated to have an initial cost of $65,000 and a salvage value of $52,000 at the end of its useful life of 6 years. In addition, the process requires a fixed cost of $47,000 per year and a variable cost of $250 per day. Alternatively, Process B requires the use of human labor. The process will need 6 workers, each earning $200 per day and will have a fixed cost of $36,000 per year and additional variable costs of $200 per day. Determine the minimum number of days per year required for the two processes to break even at an interest rate of 2% per year.

4) Two machines are under consideration for a new production line. Machine X costs $50,000 and is expected to have a salvage value of $6500 at the end of its useful life of 5 years. It will have a fixed cost of $16,000 per year and a variable cost of $55 per unit per year. On the other hand, machine Y costs $55,000 and is expected to have a salvage value of $7000 at the end of its useful life of 7 years. It will have a fixed cost of $14,500 per year and a variable cost of $58 per unit per year. Determine the quantity that must be produced for the two machines to break even at an interest rate of 3% per year.

5) Two different machines are under consideration for a reengineering project. Machine X is expected to have an initial cost of $74,000 and an expected life of 7 years. It will have a fixed cost of $10,000 per year and a variable cost of $60 per unit per year. Process Y is expected to have a useful life of 9 years. It will have a fixed cost of $8500 per year and a variable cost of $57 per unit per year. Determine the amount the company can spend on Machine Y so the two machines will break even at an interest rate of 11% per year. Assume the current process capacity of 150 units per year is used for the analysis.

6) The estimated cash flows of an investment project are shown below.

Item |
Estimated Cash Flows |
Sensitivity Range |

Initial investment, $ |
55,000 |
±5% |

Annual revenue, $ |
7000 |
±10% |

Annual expense, $ |
4500 |
±10% |

Market value, $ |
1800 |
±15% |

Project life, years |
8 |
±5% |

Using an interest rate of 2% per year, analyze the sensitivity of the PW to changes in initial investment and annual revenue, and determine the breakeven percentage changes of these two factors.