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A B Question 5: A company is faced with three proposed methods for making one of their products. Different costs of each method are as follows. An 8% interest rate is used by the company in evaluating investment alternatives. For what ranges of annual production volume values is each method preferred? Apply AW analysis and show the ranges graphically Method Purchasing cost Salvage value life of a machine 5,000 10,000 8,000 2,000 2,000 Additional cost per unit 20 15 25 7 7 7

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