Construct a payoff table using the expected value model

Assignment Help Finance Basics

Reference no: EM1356482

Determine the financial risks of manufacturing 6,000 units of a product rather than purchasing them from a vendor.

Manufacture = $50,000 one-time set up cost + $60/unit

% defective 0% 1% 2% 3% 4%

Probability
of occurrence (%) 40% 30% 20% 6% 4%

Cost to replace defectives = $145

Purchase = $66.50/unit, 100% defect free

Construct a payoff table, and using the expected-value model, determine the financial risk and whether the make or buy option is best.

Reference no: EM1356482

Questions Cloud

Writing the journal entry to write off receivable : Prepare the journal entry for Sorter Company to write off the Ordonez receivable. When writing the journal entry use Dr. for debit and Cr. for credit.

What is the final velocity of the ball : A highway curve of radius 500 m is designed for traffic moving at a speed of 73 km/hr. What is the correct banking angle of the road.

Positive and negative reinforcement : Compare and contrast positive and negative reinforcement.

Program to overload addition operator : The class should also provide the following overloaded operator capabilities: Overload the addition operator (+) to add two Polynomials.

Construct a payoff table using the expected value model : Estimate the financial risks of manufacturing 6,000 units of a product rather than buying them from a vendor. Manufacture = $50,000 one-time set up cost + $60/unit

What farms to produce more or less corn and in econmic : Assume that being sustitutes for one another, corn and soybean require the same raw material such as land, will farmers use their soybean farms to produce more or less corn and in econmic.

Explain and determine why you think bullock studios arrived : Explain and determine why you think Bullock Studios arrived at the decision to properly enter the cameras and camera cases.

Calculate the average velocity for the entire trip : Thermal energy can shift some of the electrons in a hot semiconductor from valence levels to conduction levels. What effect do these shifts have on the semiconductor's ability to conduct electricity.

Explain how management might decide whether to focus : Explain how management might decide whether to focus on short term or long term goals and how that decision impacts the organization.

User Account

All Pages