Breakeven between purchasing and manufacturing the mechanism

Assignment Help Financial Management

Reference no: EM131180584

Toys R Us can purchase mechanisms to be used in making certain toys for $60 each. They can manufacture their own mechanisms for $7000 per year fixed cost plus $35 for each mechanism, provided they purchase a machine for $100000 that will have a 10 year life and salvage value of $20000. For MARR of 12% per year, what annual production rate would result in breakeven between purchasing and manufacturing the mechanisms?

Reference no: EM131180584

Questions Cloud

Describe the parallel relationship : Describe the parallel relationship that exists between a small business communication and a personal communication.

Explain the concept of internal rate of return : Explain the concept of internal rate of return (IRR) as it is applied to the management of medical projects. Provide a specific example related to your own work or professional interests.

Book value balance sheet : Bolster Foods’ book value balance sheet shows a total of $25 million long-term debt with a coupon rate of 8.5%. The bond has 15 years remaining, and it’s currently trading at 120% of the face value. The firm issued $100 million worth of common stock ..

Disadvantages of compensating salespeople by salary : What are the advantages and disadvantages of compensating salespeople by salary? By commissions?- What do you think is an acceptable compromise?

Breakeven between purchasing and manufacturing the mechanism : Toys R Us can purchase mechanisms to be used in making certain toys for $60 each. They can manufacture their own mechanisms for $7000 per year fixed cost plus $35 for each mechanism, provided they purchase a machine for $100000 that will have a 10 ye..

Find the terminal stock price using benchmark pe ratio : In practice, a common way to value a share of stock when a company pays dividends is to value the dividends over the next five years or so, then find the “terminal” stock price using a benchmark PE ratio. Suppose a company just paid a dividend of $1...

Write the needed sql to list all product names : Write the needed SQL to list all product names (and only product names) from the Products table that fall into the category of "condiments." The list of products should be in ascending order.

What additional factors should moore evaluate : What suggestions can you offer that would help Moore make this decision? - How could Moore go about determining the cost-effectiveness of this strategy?

Discuss any educational requirements of the job : Explain what the career requires you know about the legal system. Discuss any educational requirements of the job. Describe what an undergraduate psychology student may have to do to become eligible for this job.

User Account

All Pages