Which method would be more economical

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A product can be assembled manually for $0.50 per unit. Alternatively, a machine would cost $60,000 initially could assemble a unit for only $0.03. The machine is expected to have a service life of fifteen years and no salvage value. Interest rate is 12%. At what production rate (units per year) will the costs of manual and machine assembly be equal? If the production rate is expected to be higher than this, which method would be more economical?

Reference no: EM131797175

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