Select : O a . Contract ProductionO b . Solution needs more cash flow estimates . O c . In - house production . A company that manufactures magnetic membrane switches is investigating two production options that have the estimated cash flowsshown ($1 million units). Which one should be selected on the basis of a present worth analysis at 10% per year?In-houseContractFirst Cost, $-30Annual Cost, $ per year--5Annual Income, $ per year143.1Salvage Value, $Life, years

The present worth of the expenses are how much the expenses are worth today. Present worth of costs…

Answered: Contract Production O b . Solution…

Business

Economics

Contract Production O b . Solution needs more cash

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Select : O a . Contract Production O b . Solution needs more cash flow estimates . O c . In - house production .

A company that manufactures magnetic membrane switches is investigating two production options that have the estimated cash flows
shown ($1 million units). Which one should be selected on the basis of a present worth analysis at 10% per year?
In-house
Contract
First Cost, $
-30
Annual Cost, $ per year
--5
Annual Income, $ per year
14
3.1
Salvage Value, $
Life, years

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