An investor has agreed to produce 100 waffles/day for a restaurant, which is willing to pay 5₺ for each waffle. A waffle machine is urgently required to begin production. Meanwhile, the investor quickly finds two waffle machines from a supplier. Each machine has an expected 1-year lifetime. a.Please demonstrate the break-even points for both options, separately. b.After producing for one-year, which option will lead to more profits?
An investor has agreed to produce 100 waffles/day for a restaurant, which is willing to pay 5₺ for each waffle. A waffle machine is urgently required to begin production. Meanwhile, the investor quickly finds two waffle machines from a supplier. Each machine has an expected 1-year lifetime. a.Please demonstrate the break-even points for both options, separately. b.After producing for one-year, which option will lead to more profits?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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An investor has agreed to produce 100 waffles/day for a restaurant, which is willing to pay 5₺ for each waffle. A waffle machine is urgently required to begin production. Meanwhile, the investor quickly finds two waffle machines from a supplier. Each machine has an expected 1-year lifetime.
a.Please demonstrate the break-even points for both options, separately.
b.After producing for one-year, which option will lead to more profits?
Transcribed Image Text:Unit cost
Total investment required
before production
Waffle Machine
to produce Notes by the investor
Brand: Wiaomi
10.000 t
2 +. "this one costs less at the
2も
beginning"
Energy Efficiency: Moderate
Brand: Riemens
20.000 t
"while using, this one should
offer better energy efficiency"
Energy Efficiency: High
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