and alternative 2 is to purchase from outside. Determine the break-even qua between the two alternatives using the data gven in the table and i=10%. [Note: You may use TC=FC+v,Q and TC1 TC2 per year] Alternative 1: Manufacture the Part A machine will be needed for production: Initial cost of the machine will be P=$72,000 and salvage value will be F=$8000 dollars after 6 years of life. The variable production cost will be V=$1.6 per unit. Alternative 2: Purchase the part from The part will be purchased at a cost of v2=$6 per unit. loutside
Cost of Debt, Cost of Preferred Stock
This article deals with the estimation of the value of capital and its components. we'll find out how to estimate the value of debt, the value of preferred shares , and therefore the cost of common shares . we will also determine the way to compute the load of every cost of the capital component then they're going to estimate the general cost of capital. The cost of capital refers to the return rate that an organization gives to its investors. If an organization doesn’t provide enough return, economic process will decrease the costs of their stock and bonds to revive the balance. A firm’s long-run and short-run financial decisions are linked to every other by the assistance of the firm’s cost of capital.
Cost of Common Stock
Common stock is a type of security/instrument issued to Equity shareholders of the Company. These are commonly known as equity shares in India. It is also called ‘Common equity
![7- A part is to be used in the assembly of a product. Alternative 1 is to manufacture it in-house
and alternative 2 is to purchase from outside. Determine the break-even quantity per year
between the two alternatives using the data gven in the table and =10%.
[Note: You may use TC=FC+vQ and TC1=TC2 per year]
Alternative 1: A machine will be needed for production: Initial cost of the
Manufacture
the Part
machine will be P=$72,000 and salvage value will be F=s8000
dollars after 6 years of life. The variable production cost will be
V=$1.6 per unit.
Alternative 2:
Purchase the
part from
Outside
The part will be purchased at a cost of v2=$6 per unit.
a)
12000 Units
b) O 1500 Units
c)O 4568 Units
d)
3522 Units
e)
1364 Units
O Leave blank](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fbed11051-12eb-4924-bf05-d900685a0607%2Fa18d7548-ece4-4cd7-9b68-40fcb7914315%2Fyfkays_processed.png&w=3840&q=75)
Step by step
Solved in 2 steps
