A company sells Choco cookies for $15 each and can sell 3,000 per year; $5 of the product price is profit. The company is considering buying a new piece of equipment that will cost $100,000. The new machine will produce Choco Nut that cost $10 to make, can be sold for $15. And can sell 5,000 units of per year. How many years, based on the profit of ChocoNut, will it take the company to completely pay for the machine with it]s profit.

Question

munish · Answer

yes, see the company after investing $100,000 is selling choco nut at price 15$ and selling 5,000 so it will earn 75,000$ out of it. Secondly the cost price of the choconut is 10$ and the company selling at 15$ so the profit earned will be:
profit=Selling price-cost price
=(15$*5,000)-(10$*5,000)=25,000$
so total earned money will be 75,000$+25,000$=100,000$

anonymous · Answer

First you need to think about the profit on each unit.
Then you need to find the profit that ChocoNut can produce per year (Number of units * Profit of one unit)
Once you have this, you should be able to find how long it will take to make the $100,000 required to cover the cost of the machinery