Your company is trying to decide whether to host email with Google Cloud or continue to run it in house with Microsoft Exchange. The current solution Microsoft Exchange has maintenance costs of $15,000, hardware costs of $10,000 and $30,000 in support costs annually. Google Cloud costs $35,000 annually. What amount of indirect costs are acceptable to make the switch to Google Cloud worthwhile?

Your company is trying to decide whether to host email with Google Cloud or continue to run it in house with Microsoft Exchange. The current solution Microsoft Exchange has maintenance costs of $15,000, hardware costs of $10,000 and $30,000 in support costs annually. Google Cloud costs $35,000 annually. What amount of indirect costs are acceptable to make the switch to Google Cloud worthwhile?

Essentials of Business Analytics (MindTap Course List)

2nd Edition

ISBN:9781305627734

Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Chapter15: Decision Analysis

Section: Chapter Questions

Problem 5P: Hudson Corporation is considering three options for managing its data warehouse: continuing with its...

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Hudson Corporation is considering three options for managing its data warehouse: continuing with its own staff, hiring an outside vendor to do the managing, or using a combination of its own staff and an outside vendor. The cost of the operation depends on future demand. The annual cost of each option (in thousands of dollars) depends on demand as follows: If the demand probabilities are 0.2, 0.5, and 0.3, which decision alternative will minimize the expected cost of the data warehouse? What is the expected annual cost associated with that recommendation? Construct a risk profile for the optimal decision in part (a). What is the probability of the cost exceeding $700,000?
Eastman Publishing Company is considering publishing an electronic textbook about spreadsheet applications for business. The fixed cost of manuscript preparation, textbook design, and web-site construction is estimated to be $175,000. Variable processing costs are estimated to be $8 per book. The publisher plans to sell single-user access to the book for $54. (a) Build a spreadsheet model in Excel to calculate the profit/loss for a given demand. What profit can be anticipated with a demand of 3,300 copies? For subtractive or negative numbers use a minus sign. -23,200 (b) Use a data table to vary demand from 1,000 to 6,000 in increments of 200 to test the sensitivity of profit to demand. Breakeven occurs where profit goes from a negative to a positive value, that is, breakeven is where total revenue = total cost yielding a profit of zero. In which interval of demand does breakeven occur? (i) Breakeven appears in the interval of 3,400 to 3,600 copies. (ii) Breakeven appears in the…
Yahoo was using Huawei's hardware and technology for their internet related business platforms. Now due to the new policy of the company, Yahoo wants to use Apple's Hardware and technology. Yahoo says features given by Apple are better than Huawei. The switching cost that Yahoo is going to face is_ O a. Information and data related switching costs. O b. Contractual commitment related switching costs. c. All of these O d. Financial commitment related switching costs.
Eastman Publishing Company is considering publishing an electronic textbook about spreadsheet applications for business. The fixed cast of manuscript preparation, textbook design, and web-site construction is estimated to be $155,000. Variable processing costs are estimated to be $6 per book. The publisher plans to sell single-user access to the book for $47. (a) Build a spreadsheet model in Excel to calculate the profit/loss for a given demand. What profit can be anticipated with a demand of 3,200 copies? For subtractive or negative numbers use a minus sign. -23800 (b) Use a data table to vary demand from 1,000 to 6,000 in increments of 200 to test the sensitivity of profit to demand. Breakeven occurs where profit goes from a negative to a positive value, that is, breakeven is where total revenue - total cost yielding a profit of zero. In which interval of demand does breakeven occur? (1) Breakeven appears in the interval of 3,200 to 3,400 copies. (1) Breakeven appears in the interval…
Eastman Publishing Company is considering publishing an electronic textbook about spreadsheet applications for business. The fixed cost of manuscript preparation, textbook design, and website construction is estimated to be $160,000. Variable processing costs are estimated to be $6.00 per book. The publisher plans to sell single-user access to the book for $46. a. Build a spreadsheet model to calculate the profit/loss for a given demand. For example, what profit can be anticipated with a demand of 3500 copies? b. Use a data table to very demand from 1000 to 6000 in increments of 200 to assess the sensitivity of profit to demand. c. Use Goal Seek to determine the access price per copy that the publisher must charge to break even with the demand of 3500 copies. Before you move on to Problem 2, make sure you save your workbook with this value displayed or else you will not receive credit.
GIGA Ltd Giga Ltd (Giga) is an internet service provider. With their competition offering much faster internet connections, Giga is considering purchasing a new mainframe computer to speed up its' internet service. The computer costs R1 894 599 and the installation cost amounts to R222 000. Giga also has to train its staff to operate the computer at a cost of R155 000 prior to using the computer system. The increased internet speed will attract new clients and therefore additional revenue. The incremental profit before tax after correctly accounting for the depreciation but excluding training. of the new computer system is estimated to be as follows: Year 1 2 3 Profit before tax 1 142 900 2213 000 1 643 200 If the computer is purchased the accounts receivable will increase by R225 000 and accounts payable will increase by R90 000 for the duration of the project. The working capital will not be recovered at the end of the project. The computer has a useful life of 3 years with R500 000…
Relevant costs, opportunity costs. Gavin Martin, the general manager of Oregano Software, must decide when to release the new version of Oregano’s spreadsheet package, Easyspread 2.0. Development of Easyspread 2.0 is complete; however, the diskettes, compact discs, and user manuals have not yet been produced. The product can be shipped starting July 1, 2017. The major problem is that Oregano has overstocked the previous version of its spreadsheet package, Easyspread 1.0. Martin knows that once Easyspread 2.0 is introduced, Oregano will not be able to sell any more units of Easyspread 1.0. Rather than just throwing away the inventory of Easyspread 1.0, Martin is wondering if it might be better to continue to sell Easyspread 1.0 for the next three months and introduce Easyspread 2.0 on October 1, 2017, when the inventory of Easyspread 1.0 will be sold out. The following information is available:
A computer hardware firm sells both laptop computers and printers. Through the magic of focus groups, their pricing team determines that they have an equal number of three types of customers, and that these customers' reservation prices are as illustrated in the figure below. Printer $100 Bundle $950 $1,000 $750 Laptop $850 Customer A Customer B $950 $600 $50 $150 Customer C Assume for simplicity the marginal cost of production for laptops and printers is zero. If the firm were to charge only individual prices (not use the bundle price), what prices should it set for its laptops and printers to maximize profit? Assuming for simplicity that the firm has only one customers of each type, how much does it earn in total? To maximize profit using individual prices, the firm should charge a price for laptops of p= 650 and a price for printers of p= 100 (Enter your responses as whole numbers.)
I know there is a Bartleby on this, but the commas are all out of place and I'm still confused. Could you give a more in-depth solution and explain on how to calcultae FCF, specifically with excel functions? We are entering the widget business. It costs $500,000, payable in year 1, to develop a prototype. This cost can be depreciated on a straight-line basis during years 1-5. Each widget sells for $40 and incurs a variable cost of $20. During year 1 the market size is 100,000, and the market size is growing at 10% per year. Profits are taxed at 40%, but there are no taxes on negative profits. a) Given our other assumptions, what market share (in %) is needed to ensure the total free cash flow (FCF) of $0 over the five year period? Note: FCF during a year equals after-tax profits plus depreciation minus fixed costs (if any).b) Describe how an increase in percent market growth rate changes total FCF over years 1-5.c) Describe how simultaneous changes in percent market share and changes…
Suppose you can either make computer chips or smartphone chips. If you produce computer chips, you earn a Total Revenue of $20 million and your Explicit Costs are $15 million. If you produce smartphone chips, you earn a Total Revenue of $25 million and your Explicit Costs are $21 million. What are the Implicit Costs of producing computer chips? $4 million $5 million $15 million $21 million
Hint(s) Check My Work (All answers were generated using 1,000 trials and native Excel functionality.) The management of Madeira Computing is considering the introduction of a wearable electronic device with the functionality of a laptop computer and phone. The fixed cost to launch this new product is $300,000. The variable cost for the product is expected to be between $192 and $288, with a most likely value of $240 per unit. The product will sell for $360 per unit. Demand for the product is expected to range from 0 to approximately 20,000 units, with 4,000 units the most likely. (a) Develop a what if spreadsheet model computing profit for this product in the base case, worst case, and best case scenarios If your answer is negative, use minus sign Best-case profit Worst case profit Base-case profit S (b) Model the variable cost as a uniform random vanable with a minimum of $192 and a maximum of $288. Model the product demand as 1,000 times the value of a gamma random variable with an…
Hint(s) Check My Work (All answers were generated using 1,000 trials and native Excel functionality.) The management of Madeira Computing is considering the introduction of a wearable electronic device with the functionality of a laptop computer and phone. The fixed cost to launch this new product is $300,000. The variable cost for the product is expected to be between $192 and $288, with a most likely value of $240 per unit. The product will sell for $360 per unit. Demand for the product is expected to range from 0 to approximately 20,000 units, with 4,000 units the most likely. (a) Develop a what-if spreadsheet model computing profit for this product in the base-case, worst-case, and best-case scenarios. If your answer is negative, use minus sign. Best-case profit Worst-case profit Base-case profit (b) Model the variable cost as a uniform random variable with a minimum of $192 and a maximum of $288. Model the product demand as 1,000 times the value of a gamma random variable with an…