A firm is considering two location alternatives. At location Houston, fixed costs would be $4,000,000 per year, and variable costs $0.30 per unit. At alternative Boston, fixed costs would be $3,600,000 per year, with variable costs of $0.35 per unit. If annual demand is expected to be 10 million units, which plant offers the lowest total cost?

Peppy knows a lot about marketing, but not much about the legal or financial aspects of starting a new business. he wants to consult with a lawyer and accountant, but his budget is tight with all of the expenses involved in getting peppy's pizzazzeria up and running. peppy should: trust his basic instincts and try to put it together without the advice of lawyers and accountants. delay talking with a lawyer and accountant until the business has established a positive cash flow for at least one year. immediately hire full-time lawyers and accountants for his staff. consult with a lawyer and accountant even though the budget is tight.