Staff salaries: $650,000 including a senior staff member who is paid $80,000 and who will remain on
Question:
Staff salaries: $650,000 including a senior staff member who is paid $80,000 and who will remain on staff to oversee the university’s interests in dealings with the public relations firm. All other staff would be let go. The university incurs additional costs for healthcare and other benefits at a rate of 30 percent of staff salaries. Fixed equipment: The computers and media equipment in the department were purchased 4 years ago. They cannot be used by any other department at Hudson and cannot be sold. Depreciation expenses from the equipment are $20,000 per year. The net book value of the equipment is $60,000. Printing costs: If the university contracts out it will no longer have to print external media documents, which cost $150,000 this year.
Based solely on financial considerations, should Hudson accept the contract? Why?
Expert Answer:
ANSWER AS PER THE REQUIREMENT OF THE ABOVE QUESTION THE ANSWER IS BELOW THE COST WHI... View the full answer
