Question: please help solve You received partial credit in the previous attempt View previous attempt Check my werk 6 Problem 16-11 (Algo) 3 points Boo One
please help solve
You received partial credit in the previous attempt View previous attempt Check my werk 6 Problem 16-11 (Algo) 3 points Boo One 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 of 100,000 parts in year : 300.000 in year 2 and 500,000 in year 3 Shipping and handling of parts from the supplier's factory is estimated at $0.02 per unit. Additional inventory handing charges should amount to $0.004 per unit. Finally, administrative costs are estimated at $10 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 $10,000. Direct materials can be purchased for $0.05 per unit Direct laboris estimated 50,03 per unit for wages plus a 50 percent surcharge for benefits and, Indirect laboris estimated at $0.03 per unit plus 50 percent benefits. Up-front engineering and design costs will amount to $40,000. Finally, management has insisted that overhead be allocated if the parts are made in-house at a rate of 100 percent of direct labor wage costs. The firm uses a cost of capital of 15 percent per year a. Calculate the difference in NPVs between the Make and Buy options Express al 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) D one NP Refrences b. Should you continue to produce in house or accept the bid from your Taiwanese supplier? Accept the bid Pin
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