Harmony Auto Group sells and services imported and domestic cars. The owner is considering outsourcing all of

Fantastic news! We've Found the answer you've been seeking!

Question:

Harmony Auto Group sells and services imported and domestic cars. The owner is considering outsourcing all of its new auto warranty service work to Winslow, Inc., a private repair service that works on any make and year car. Either a 5-year. contract basis or 10-year license agreement are available from Winslow. Revenue from the manufacturer will be shared with no added cost incurred by the car/warranty owner. Alternatively, Harmony can continue to do warranty work in-house. Use the estimates made by the Harmony owner to perform an annual worth evaluation at MARR @ Z % per year to select the best option. All 7.5 dollar values are in millions. Z is 3+ multiple of first and last number of your roll digit. Also compute the capital recovery for each alternate

Contract

0

2

2.5 5

License

2

0.2

1.5 10

In-house

30

5

9

First cost,S

Annual cost, S per year

Annual income, S per Life, years

year