A firm plans to begin production of a new small appliance. The manager must decide whether...

A firm plans to begin production of a new small appliance. The manager must decide whether to purchase the motors for the appliance from a vendor for $7.30 each or to produce them in house. There are two in house options.

Option 1 would have an annual fixed cost of $160000 and a variable cost of $5.30.

Option 2 would have an annual fixed cost of $191000 and a variable cost of $3.90.

Calculate the maximum quantity that would have the manager select purchasing the motors from the vendor.

Your Answer:

Expert Solution

ekkarill92 answered 2 years ago

Question MUST be answered in EXCEL A bank manager must decide whether or not to hire...

Question MUST be answered in EXCEL A bank manager must decide whether or not to hire additional tellers. His decision will depend partly upon how long it takes to complete customer transactions. The null hypothesis is that the mean transaction completion time, , is at most 40 seconds. The population standard deviation is assumed to be 10 seconds. If the null is rejected, new tellers will be hired. A sample of 50 transactions was obtained with a mean of 37.5...

A company is about to begin production of a new product. The manager of the department...

A company is about to begin production of a new product. The manager of the department that will produce one of the components for the product wants to know how often the machine used to produce the item will be available for other work. The machine will produce the item at a rate of 200 units a day. Eighty units will be used daily in assembling the final product. Assembly will take place five days a week, 50 weeks a...

Question 2 A manager is trying to decide whether to build a small, medium, or large...

Question 2 A manager is trying to decide whether to build a small, medium, or large facility. Demand can be low, average, or high, with the estimated probabilities being 0.25, 0.40, and 0.35, respectively. A small facility is expected to earn an after-tax net present value of just $18,000 if demand is low. If demand is average, the small facility is expected to earn $75,000; it can be increased to medium size to earn a net present value of $60,000....

Corporation A plans to launch a new project and the financial manager is considering whether this...

Corporation A plans to launch a new project and the financial manager is considering whether this is a valuable investment for the corporation. Consider: The initial cost of this project is $197.92, and it offers cash flows in the next 3 years, with an estimated cash flow of $ 50 in the first year, $100 in the second year and $150 in the third year. Questions: 1. What is the Internal Rate of Return (IRR) of this project? 2. If...

A firm must decide whether to make a component part in-house or to contract it out...

A firm must decide whether to make a component part in-house or to contract it out to an independent supplier. Manufacturing the part requires a nonrecoverable investment in specialized assets. The most efficient suppliers are located in countries with currencies that many foreign exchange analysts expect to appreciate substantially over the next decade. What are the pros and cons of (a) manufacturing the component in-house and (b) outsourcing manufacturing to an independent supplier? Which option would you recommend and why?...

A concessions manager at the Tech versus A&M football game must decide whether to have the...

A concessions manager at the Tech versus A&M football game must decide whether to have the vendors sell sun visors or umbrellas. There is a 35% chance of rain, a 25% chance of overcast skies, and a 40% chance of sunshine, according to the weather forecast in college junction, where the game is to be held. The manager estimates that the following profits will result from each decision, given each set of weather conditions: Decision Weather Conditions Rain 0.35 Overcast...

F.J. Brewerton Retailers, Inc., must decide whether to build a small or a large facility at...

F.J. Brewerton Retailers, Inc., must decide whether to build a small or a large facility at a new location in Omaha. Demand at the location will either be low or high, with probabilities 0.4 and 0.6, respectively. If Brewerton builds a small facility and demand proves to be high, he then has the option of expanding the facility. If a small facility is built and demand proves to be high, and then the reatiler expands the facitliy, the payoff is...

How does a firm decide whether to shut down production in the short run and in...

How does a firm decide whether to shut down production in the short run and in the long run? Explain both scenarios Can a competitive firm earn positive profits in the long run? Explain.

There are two firms, Cope and Peski, in an oligopolistic industry. Each firm must decide whether...

There are two firms, Cope and Peski, in an oligopolistic industry. Each firm must decide whether or not to advertise during the Super Bowl this year. The diagram below represents the matrix of expected profit payoffs for each firm depending on which of the four possible outcomes becomes reality. The first number in each cell represents the expected profit for Peski given the relevant combination of strategies for each firm. The second number in each cell represents the expected profit...

Problem 1 The manager of a construction company must decide whether to build single family homes,...

Problem 1 The manager of a construction company must decide whether to build single family homes, apartments, or condominiums. Profits (in thousands of dollars) are given in the following table and depend on various possible population trends. The probability of a declining population is 0.3, the probability for a stable population is 0.5 and the probability of a growing population is 0.2 Payoff table (in thousands of dollars): Population Declining Stable Growing Single Family Homes 220 80 75 Apartments 85...

Question