Make or Buy Alternative 12. Your production line uses 10,000 filter housings per week at a cost of $0.85 per unit. Should you start making them yourself? MARR = 12%. Make Buy Capital Expenditure Salvage (after 10 yr) Annual O/M $240K $45K Materials $233K $442K

Make or Buy Alternative 12. Your production line uses 10,000 filter housings per week at a cost of $0.85 per unit. Should you start making them yourself? MARR = 12%. Make Buy Capital Expenditure Salvage (after 10 yr) Annual O/M $240K $45K Materials $233K $442K

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Question

Make or Buy Alternative
12. Your production line uses 10,000 filter housings per week at a cost of $0.85 per unit.
Should you start making them yourself? MARR = 12%.
Make
Buy
Capital Expenditure
Salvage (after 10 yr)
Annual O/M
$240K
$45K
$233K
$300K
$150K
$256K
$939K
$442K
$240K
$100K
$200K
Materials
Overhead
Labor
Maintenance
Total
$982K

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