3. We are buying a component for one of our products at a price of $30. We can make this component in-house for $10 per item by an investment of $500,000 and an annual operating cost of $100,000. This investment lasts 10 years with zero salvage value, and MARR is 10% per year. Evaluate "buy" versus "make" option for this component buy calculating the break-even quantity.
3. We are buying a component for one of our products at a price of $30. We can make this component in-house for $10 per item by an investment of $500,000 and an annual operating cost of $100,000. This investment lasts 10 years with zero salvage value, and MARR is 10% per year. Evaluate "buy" versus "make" option for this component buy calculating the break-even quantity.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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