13 Trellit The Mechanical Components Division manager asks you to recommend a make/buy decision on a major automotive subassembly that is currently purchased externally for a total of $3.9 million this year. This cost is expected to continue rising at a rate of $300.000 per year. Your manager asks that both direct and indirect costs be included when in-house manufacturing (make alternative) is evaluated. New equipment will cost $3,4 million, have a salvage of $0.5 million and a life of 6 years. Estimates of materials, labor costs, and other direct costs are $1.6 million, per year. Typical indirect rates, bases, and expected usage are shown. Perform the AW evaluation at MADD = 12\% nor mas nuar a f.voar sturiu notind The annual worth for the make decision is $ The annual worth for the buy deciston is $ The alternative is selected. 13 Trellit The Mechanical Components Division manager asks you to recommend a make/buy decision on a major automotive subassembly that is currently purchased externally for a total of $3.9 million this year. This cost is expected to continue rising at a rate of $300.000 per year. Your manager asks that both direct and indirect costs be included when in-house manufacturing (make alternative) is evaluated. New equipment will cost $3,4 million, have a salvage of $0.5 million and a life of 6 years. Estimates of materials, labor costs, and other direct costs are $1.6 million, per year. Typical indirect rates, bases, and expected usage are shown. Perform the AW evaluation at MADD = 12\% nor mas nuar a f.voar sturiu notind The annual worth for the make decision is $ The annual worth for the buy deciston is $ The alternative is selected