Karla's candle factory is considering two different manufacturing options. option a is highly automated with fixed costs of $25,000 and variable costs of $.1/candle. option b uses hand labor with fixed costs of $10,000 and variable costs of $.5/candle. if demand for karla's candles is 25,000, which option should she pick?

$16,800

Explanation:

Pam's income from annuity payments can be calculated by deducting exclusion for capital recovery from the collection in 2018. To find exclusion per recovery we need to divide total contribution from qualified funds in the number of anticipated monthly annuity payments.

Total contribution from qualified funds = $42,000

The number of anticipated monthly annuity payments = 210

Exclusion per recovery = $42,000/210

Exclusion per recovery = $200

Collection in 2018 ($3,000 x 6) = $18,000

Exclusion ($200 x 6) = $1,200

Income in the first year = $18,000 - $1,200

Income in the first year = $16,800

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