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Business, 13.03.2020 00:42 Anabel818

Company X has been contracting its overhauling work to Company Y for $45 comma 000 per machine per year. Company X estimates that by building a $510 comma 000 maintenance facility with a life of 15 years and a salvage value of $130 comma 000 at the end of its life, it could handle its own overhauling at a cost of only $35 comma 000 per machine per year. What is the minimum annual number of machines that Company X must operate to make it economically feasible to build its own facility? (Assume an interest rate of 11%.)

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