Question

"You are the office manager for Dr. Williams. The increasing cost of

making photocopies has Dr. Williams concerned. She wants you to
look at an alternative to the present arrangement. The office now
leases a copy machine for $110 per month and $0.025 per copy. You
find that you can buy a copier with a 3-year payment plan of $125 per
month and the cost per copy will run $0.015.
If the office expects to run 100,000 copies per year, which is the
better plan?

Answer 1

To determine which plan is better, we need to calculate the total cost for each option based on the given information. By comparing the total costs, we can determine which plan is a better choice.

Step-by-step explanation:

To determine which plan is better, we need to calculate the total cost for each option based on the given information. For the current lease option, the monthly cost is $110 and the cost per copy is $0.025. If the office expects to run 100,000 copies per year, the total cost for this option would be:

Total cost per year = Monthly cost + (Cost per copy * Number of copies per year)

Total cost per year = $110 + ($0.025 * 100,000)

Similarly, for the buying option, the monthly cost is $125 and the cost per copy is $0.015. The total cost for this option would be:

Total cost per year = Monthly cost + (Cost per copy * Number of copies per year)

Total cost per year = $125 + ($0.015 * 100,000)

By calculating both options, we can compare the total costs to determine which plan is better.