Business, 02.03.2020 19:47 claudia122752

The College of Business is deciding between two photocopier options. The first is to lease a high-end machine for $8,400/year. The lease is all-inclusive so the only additional costs are the cost of paper, which is $0.01/sheet. The other option is to purchase a machine. The cost is $5,000 and the per sheet cost increases (toner, maintenance) to $0.02.

Which option is preferred if the annual copy volume is expected to be 270,000? What if the copy volume is reduced to 240,000? At what volume is the College indifferent between the two options?

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