Assume that you are offered a new piece of equipment for $10,000.The equipment will produce 10,000 units per year with a margin of $6.00 per unit.Demand for the product being produced has been 2,000 units per year.Your current equipment is fully depreciated and can produce the 2,000 units per year at but at a margin of only $4.00 per unit.Should you purchase the new equipment? Under what conditions?

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The Answer of Assume that you are offered a new piece of equipment for $10,000.The equipment will produce 10,000 units per year with a margin of $6.00 per unit.Demand for the product being produced has been 2,000 units per year.Your current equipment is fully depreciated and can produce the 2,000 units per year at but at a margin of only $4.00 per unit.Should you purchase the new equipment? Under what conditions?

Assume That You Are Offered a New Piece of Equipment