a. A project is not a black box. Senior managers must know where the positive NPVs...

 

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a. "A project is not a black box. Senior managers must know where the positive NPVs come from. Otherwise they will be continuously bombarded with requests for funds for capital expenditures. Senior managers must know whether the projects are proposed by them because they have positive NPVs or do they have positive NPVs because they are proposed." - In your own words, evaluate the above statement with regards to the sources of positive NPV in capital investments (not more than 300 words). The marks of your answers will be awarded based on: Relevance of answers and logical developed discussion of the proposed answers. Originality and creativity of analysis behind every discussion provided. Overall presentation including word limit, clarity of writings and grammars. b. YTL Industrial Products uses 4,000 switch assemblies per month and then reorders another 4,000 units. The price is $54.70 per switch assembly. The annual carrying cost per switch assembly is 20 percent of the price. The fixed order cost is $82, which includes a $32 setup charge. [Note: Please provide your answers in two decimal places] i. What is the Economic Order Quantity (EOQ) for YTL? ii. What are the total inventory costs? iii. If YTL purchases switch assemblies in quantities of at least 2,000 units per month, the switch assembly supplier agrees to pay the setup charge. Should YTL take up the offer? Justify your recommendation. a. "A project is not a black box. Senior managers must know where the positive NPVs come from. Otherwise they will be continuously bombarded with requests for funds for capital expenditures. Senior managers must know whether the projects are proposed by them because they have positive NPVs or do they have positive NPVs because they are proposed." - In your own words, evaluate the above statement with regards to the sources of positive NPV in capital investments (not more than 300 words). The marks of your answers will be awarded based on: Relevance of answers and logical developed discussion of the proposed answers. Originality and creativity of analysis behind every discussion provided. Overall presentation including word limit, clarity of writings and grammars. b. YTL Industrial Products uses 4,000 switch assemblies per month and then reorders another 4,000 units. The price is $54.70 per switch assembly. The annual carrying cost per switch assembly is 20 percent of the price. The fixed order cost is $82, which includes a $32 setup charge. [Note: Please provide your answers in two decimal places] i. What is the Economic Order Quantity (EOQ) for YTL? ii. What are the total inventory costs? iii. If YTL purchases switch assemblies in quantities of at least 2,000 units per month, the switch assembly supplier agrees to pay the setup charge. Should YTL take up the offer? Justify your recommendation.