14. A company is required to produce 10,000 units of calculators for which the company is contemplating to purchase either of the following two machines.
Particulars
Cost of the machine
Life of the machine
Machine A
Machine B
1.50,000
5 years
20,000
Straight line method
(3)
Salvage value at the end of the fifth year (2)
Method of depreciation
5 years
10,000
Straight line method t
The product so manufactured can be sold for 215 per unit. However, the cost of production of the product in case of machine A would be 10 whereas in the case of B, it will be 28.
The company is in the 50 per cent tax bracket Calculate the relevant cash flows.
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sorry brother I don't know about this
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Chapter purpose: Cost of production is the dollar value of all your inputs for growing a. specific crop. For example, to produce an acre of corn, these inputs would include all costs. including seed, fertilizer, chemicals, insurance, labor, machinery and land.
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