(Solution) - A hamburger factory produces 40 000 hamburgers each week The equipment -(2025 Original AI-Free Solution)

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Academic Level: Undergrad. (yrs 3-4)

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Pages: 5 Words: 1375

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A hamburger factory produces 40,000 hamburgers each week. The equipment used costs $5,000 and will remain productive for 4 years. The labor cost per year is $9,500.
a. What is the productivity measure of "units of output per dollar of input" averaged over the four-year period?
b. We have the option of $10,000 equipment, with an operating life of 5 years. It would reduce labor costs to $6,000 per year. Should we consider purchasing this equipment (using productivity arguments alone)?