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A Japanese manufacturing company preparing to build a new plant in East-Timor is considering three potential locations for it. The fixed and variable costs for the three alternative locations are presented below.
(a) Complete a numeric locational cost-volume analysis.
(b) Indicate over what range each of the alternatives A, B, C is the low-cost choice.
(c) Is any alternative never preferred? Explain.
Costs
A
B
C
Fixed ($)
2,500,000
2,000,000
3,500,000
Variable ($ per unit)
20
23
15
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