The M2 Corporation is considering expanding its ergonomics consulting business. To do so, several pieces...
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The M2 Corporation is considering expanding its ergonomics consulting business. To do so, several pieces of equipment for performing a given analysis technique must be purchased. The CEO estimates that it will cost $155,000 to expand the business, resulting in $31,000 in revenues per year, $12,000 in expenses per year, and a salvage value of $3000. If the useful life of the expansion is expected to be 15 years, and the Corporations MARR is 15%.
a. Should they undertake the expansion? You must use the Benefit/Cost Ratio to receive ANY credit.
b. What would the break-even point be for annual revenues for this problem?
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