Consider the following production data for Alternatives A and B in a firm that uses a 10% interest rate. Alt. A Alt. B Annual fixed cost per unit $2 million $3.5 million Annual variable cost per unit...


Consider the following production data for Alternatives A and B in a firm that uses a 10% interest rate.<br>Alt. A<br>Alt. B<br>Annual fixed cost per unit<br>$2 million $3.5 million<br>Annual variable cost per unit<br>850<br>250<br>If the company is going to produce 4000 units annually, which alternative should be chosen?<br>O a. This problem cannot be solved because there is not enough data given.<br>Ob. Alternative A<br>O C. Alternative B<br>O d.<br>Neither alternative should be chosen because the negative cash flows are greater than the positive cash flows<br>for both alternatives.<br>

Extracted text: Consider the following production data for Alternatives A and B in a firm that uses a 10% interest rate. Alt. A Alt. B Annual fixed cost per unit $2 million $3.5 million Annual variable cost per unit 850 250 If the company is going to produce 4000 units annually, which alternative should be chosen? O a. This problem cannot be solved because there is not enough data given. Ob. Alternative A O C. Alternative B O d. Neither alternative should be chosen because the negative cash flows are greater than the positive cash flows for both alternatives.

Jun 09, 2022
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