The owner of Firewood To Go is considering buying a hydraulic wood splitter which sells for $50,000. He figures it will cost an additional $100 per cord to purchase and split wood with this machine, while he can sell each cord of split wood for $125. How many cords of wood would he have to split with this machine to break even?
A)5,000
B)3,000
C)2,000
D)1,000
E)0

Question

Quizplus · Accepted Answer

To break even, the owner needs to cover the $50,000 cost of the machine. The profit per cord is $125 - $100 = $25. Therefore, he needs to split $50,000 / $25 = 2,000 cords to break even.

The Owner of Firewood to Go Is Considering Buying a Hydraulic