Answer to Question #93652 in Engineering for aira

Question

a photo-developing lab is examining the economics of purchasing a larger and faster processing machine that does not require a manual changeover from one size film to the next. In the past, the promised turnaround time was three days, and about 4,000 rolls a week were processed. The new machine could likely turn film around in less than one hour, an improvement that the marketing department estimates could double demand for the service. The company currently earns a PHP10 profit margin on each roll. The new machine would have ample capacity to handle the expected demand increase, plus 25% to 35% more if necessary, but would add PHP20,000 to the firm's total depreciation cost per week. By how much would the company have to raise the price per roll in order to maintain its current level of profitability?

Answer 1

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