A company is considering investing $10,000 in a heat exchanger. The heat exchanger will last 5 years, at which time it will be sold for $2,000. The maintenance cost at the end of first year is estimated to be $1,000. Maintenance costs for the exchanger are estimated to increase by $500 per year over its life. As an alternative, the company may lease the equipment for $X per year, including maintenance. a. Draw a cash flow diagram of both alternatives b. For what value of X should the company lease the heat exchanger? The company expects to earn 8% on its investments. Assume end-of-year lease payments.

Owns a machine that can produce two specialized products. production time for product tlx is two units per hour and for product mtv is four units per hour. the machine’s capacity is 2,100 hours per year. both products are sold to a single customer who has agreed to buy all of the company’s output up to a maximum of 3,570 units of product tlx and 1,610 units of product mtv. selling prices and variable costs per unit to produce the products follow. product tlx product mtv selling price per unit $ 11.50 $ 6.90 variable costs per unit 3.45 4.14 determine the company's most profitable sales mix and the contribution margin that results from that sales mix.