purchase value 10000

salvage value 500

life time (years) 5

year depreciation
1 $1,900.00
2 $1,900.00
3 $1,900.00
4 $1,900.00
5 $1,900.00
intial cost 500000
salvage value 25000
life time in years 5

depreciation
year 1 225500
year 2 123800
year 3 67966
year 4 37313
year 5 20485
 Variable Cost
Selling Price
Fixed Cost
No of units Fixed cost(Rs) Variable cost(Rs) Total cost(Rs) Revenue(Rs) Break Even
0 150 0 150 0
5 150 40 190 75
10 150 80 230 150
15 150 120 270 225
20 150 160 310 300
25 150 200 350 375

400

350

300

250

200

150

100

50

0
0 5 10 15

Fixed cost(Rs) Variable cos

Total cost(Rs) Revenue(Rs)
 8
15
150
21.42857

10 15 20 25

ost(Rs) Variable cost(Rs)

ost(Rs) Revenue(Rs)
 VC 75
SP 175
FC 12500
No of units Fixed cost(Rs) Variable cost(Rs) Total cost(Rs) Revenue(Rs) BEP 125
0 12500 0 12500 0
35 12500 2625 15125 6125
70 12500 5250 17750 12250
105 12500 7875 20375 18375
135 12500 10125 22625 23625

25000

20000

15000

10000

5000

0
0 35 70

Fixed cost(Rs) Varia

Total cost(Rs) Reve
5 70 105 135

ed cost(Rs) Variable cost(Rs)

tal cost(Rs) Revenue(Rs)
Direct costs (Rs) 75 per hour
Production rate 15 Diffusers per hour
Let x represent the number of diffusers per year.
Interest Rate 10%
Variable cost 5
Annual variable cost 5*x
Life (years) 4
Machine A
Initial cost 85000
Salvage value 6500
Annual maintanance cost 7500
WORTH OF MACHINE A 22681
ANNUAL WORTH OF MACHINE A 22681-5*x

55 PER HOUR
10 COMPONENT PER HOUR
Let x represent the number of components per year.
variable cost 3.5
annual variable cost 3.5*x
Life (years) 5

Machine B
Initial cost 68000
Salvage value 5500
Annual maintenance cost 3500
WORTH OF MACHINE B 13362
ANNUAL WORTH OF MACHINE B 13362-3.5*x

ANNUAL WORTH OF MACHINE A = ANNUAL WORTH OF MACHINE B

22681-5*x 13362-3.5*x
(-)1.5*x -9319
1.5*x = 9319
x = 6212.6666666667
13.2