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Yellow Pages Directory company must decide whether to compose their own ads or pay an...

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Basic Math

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Yellow Pages Directory company must decide whether to compose their own ads or pay an outside firm to do them They can buy them outside for 21 00 per ad If they choose to do them insidethey will have to do the following two things 1 Buy computer hardware for 12 000 This Quipment will last 3 years and have a salvage value of 2 000 2 Hire an employee at an annual cost of 45 000 per year In addition to the two new fixed costs there will also be a 4 00 per ad variable cost if they choose to prepare their own ads At 10 interest rate how many ads do they need do annually to break even they decide to prepare the ads themselvces O 1 895 ads per year O2 895 ads per year

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