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Plymouth Corp

Question 113

Multiple Choice

Plymouth Corp.sells units for $100 each.Variable costs are $75 per unit,and fixed costs are $200,000.If Plymouth leases a new machine,fixed costs will increase by $60,000 a year,but production will be more efficient,saving $5 per unit.At what level of production will Plymouth be indifferent between leasing and not leasing the new machine?


A) 5,000
B) 10,000
C) 10,400
D) 12,000

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