A Spirits Manufacturer Is Considering Two Potential Production Investments: Option

A spirits manufacturer is considering two potential production investments: Option A costs an initial $2 billion and will involve variable costs (labor and material) of $5 per bottle of spirits.Option B costs an initial $4 billion and will involve variable costs (labor and material) of $3 per bottle of spirits.Assuming an annual capital charge equal to 10 percent of the initial costs,what is the average fixed cost at production level of 30,000,000 bottles per year for the Option A facility?

A) $10.00.
B) $5.00.
C) $6.00.
D) $6.67.