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"Company X has been contracting its overhauling work to Company Y for $33,000 per machine...

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Accounting

"Company X has been contracting its overhauling work to Company Y for $33,000 per machine per year. Company X estimates that by building a $478,000 maintenance facility with a life of 12 years and a salvage value of $66,000 at the end of its life, it could handle its own overhauling at a cost of only $11,000 per machine per year. What is the minimum annual number of machines (as an integer) that Company X must operate to make it economically feasible to build its own facility? (Assume an interest rate of 15%.) Hint: calculate the annual equivalent cost of the maintenance facility."

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