Paste BIUV v v $ ~ % " :00 Conditional Format Cell Sort Formatting as Table Styles Format v Filte 126 x v fx Enter A B C D E F G H I J K L Year 0 H 1 2 3 Demand 100,000 300,000 400,000 AWN Cost of Capital 0.15 Purcanse Option Purachse Cost per Unit 0.1 $ 10,000.00 $ 30,000.00 $ 40,000.00 6 Shipping/ Unit 0.01 $ 1,000.00 $ 3,000.00 $ 4,000.00 7 Unventory Charge/ Unit 0.006 600.00 $ 1,800.00 $ 2,400.00 8 Monthly Change 30 360.00 360.00 $ 360.00 Total Purcanse Cost 10 Present Value 0.15 11 Total Net Present Value $ 11,960.00 $ 35,160.00 $ 46,760.00 NPV $ 93,880.00 12 13 14 Make Decision Costs Year 1 2 3 15 $ 100,000.00 $ 300,000.00 $ 400,000.00 16 Parts 17 Molding Machine Cost 18 Material Cost 0.04 $ 4,000.00 $ 12,000.00 $ 16,000.00 19 Direct Cost 0.05 $ 5,000.00 $ 15,000.00 $ 20,000.00 20 50% Surcharge 0.025 $ 2,500.00 $ 7,500.00 $ 10,000.00 21 Indirect Cost 0.012 $ 1,200.00 3,600.00 $ 4,800.00 22 50% Surcharge 0.006 600.00 $ 1,800.00 $ 2,400.00 23 Overhead 100% 0.05 $ 5,000.00 $ 15,000.00 $ 20,000.00 24 Total Vanable Manufacture Cost $ 18,300.00 $ 54,900.00 $ 73,200.00 25 Present Value 0.15 NPV $ 146,400.00 26 Total Net Present 27 Investment Engineer 50,000.00 28 Equipment 20,000.00 29 30 31 4000 32One of your Taiwanese suppliers has bid on a new line of molded plastic parts that is currently being assembled at your plant. The supplier has bid $0.10 per part, given a forecast you provided of100,000 parts in year 1; 300,000 in year 2; and 400,000 in year 3. Shipping and handling of parts from the supplier's factory is estimated at $0.01 per unit. Additional inventory handling charges should amount to $0.006 per unit. Finally, administrative costs are estimated at $30 per month. Although your plant is able to continue producing the part, the plant would need to invest in another molding machine, which would cost $20,000. Direct materials can be purchased for $0.04 per unit. Direct labor is estimated at $0.05 per unit plus a 50 percent surcharge for benefits; indirect labor is estimated at $0.012 per unit plus 50 percent benefits. Upfront engineering and design costs will amount to $50,000. Finally, management has insisted that overhead be allocated if the parts are made in-house at a rate of100 percent of direct labor cost. The firm uses a cost of capital of15 percent per year. 3. Calculate the difference in NPVs between the Make and Buy options. Express all costs as positive values in your calculations. It is suggested to use the NPV function in Excel. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Difference in NPV b. Should you continue to produce inhouse or accept the bid from your Taiwanese supplier? 0 Accept the bid Produce in-house Prev 1 of 3 iii Score answer )