Question

To meet the high production demand, Jack Wilsonthe owner of JG Sawmillsneeds to invest in a frame saw. He has narrowed down to two choices: a double cut frame CZ84 saw with chipper and a HY-200 saw with double arbor bearings. The cost of CZ84 will be $91,000, whereas the cost of HY-200 will be $110,000. The salvage value of each type is $0 (zero) and both will have a useful life of 4 years.

Consider a product that costs $5 to make, and is sold for $15. What is the productivity ratio?

A. 2:1

B. 1:1

C. 1:3

D. 3:1

Answer

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