(Solved):Alltech is considering the replacement of an antiquated machine that has been slowing down…

 

Question

Alltech is considering the replacement of an antiquated machine that has been slowing down production because of breakdowns and added maintenance.

The operations manager estimates that this machine still has 2 more years of possible use.

The machine produces an average of 50 units per day at a cost of $6.50 per unit, whereas other similar machines are producing twice that much. The units sell for $8.50.

Sales are equal to production on

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