Create graph to plot the total cost of each option

Assignment Help Financial Management
Reference no: EM131924005

Stan Fawcett's company currently purchases a gear assembly from Salt Lake Supply, Inc. at $3.80 per unit with a minimum order of 3000 units. Stan is considering instead of producing the gear assembly himself. He estimates that production it himself will cost $12,000 to set up the process and the $1.75 per unit for labor and materials.

Use Excel to calculate the crossover point between the two options: buy or make.

Create a graph to plot the total cost of each option and show the crossover point.

Reference no: EM131924005

Questions Cloud

What is effective annual interest rate : A used car dealer advertises financing at 0% interest over 3 years with monthly payments. What is your effective annual interest rate?
Find the size of each payment : Assuming that the rate of interest is 8% and that if once default occurs, no further payments will be made, find the size of each payment.
Under the percentage of sales forecasting method : Under the percentage of sales forecasting method, which of the following increases by the same proportion that sales increases:
Use for debt when calculating cost of capital : If the company has a $45.9 million market value of equity, what weight should it use for debt when calculating the cost of capital?
Create graph to plot the total cost of each option : Create a graph to plot the total cost of each option and show the crossover point.
Compare required return on the stock calculated using CAPM : Compare the required return on the stock calculated using CAPM against it's historical return over the last 52 weeks,
Calculate the monthly mortgage payments on a PITI basis : Ben and Marie Gerrard, both in their mid-20s, Calculate monthly mortgage payments on PITI basis. Would they qualify for loan using 27% affordability ratio?
Constant-growth dividend discount model : what is the required return applicable to the investment based on the constant-growth dividend discount model (DDM)?
What is the value of project with average risk : what is the value of a project with average risk and the expected free cash flows as shown? here,

Reviews

Write a Review

Financial Management Questions & Answers

  Maintain growth rate-what must the dividend payout ratio be

Frasier Cabinets wants to maintain a growth rate of 5 percent without incurring any additional equity financing. The firm maintains a constant debt-equity ratio of .55, a total asset turnover ratio of 1.30, and a profit margin of 9 percent. What must..

  Find the original number assuming that stocking takes place

Fisheries officials are stocking a barren lake with pike, whose number will increase annually at 40%. Fishing is prohibited the first 2 years and then 5000 pike can be removed in each of the 3rd and 4th years, so that the number remaining after the 4..

  Marketplace about future prospects for the firm

A stock dividend is a lower cost alternative to a cash dividend and can be considered at all but the initial stages of a corporate life cycle. A poison pill strategy should be considered long before an invasive corporate raider attempts to buy your f..

  What is the beta risk of polonius total assets

What is the required return on Polonius stock? What is the beta risk of Polonius’s total assets (TA)? What is the new beta of Polonius’s total assets (TA)?

  Gartner systems has no debt and equity cost of capital

Gartner Systems has no debt and an equity cost of capital of 9.1%.

  Find btcf and atcf internal rates of return

The inventory will be sold for $35K at the end of fifth year. The profits are taxed at 33%. Find BTCF and ATCF internal rates of return.

  Relieve communication problems

Communication (or the lack of it) is definitely one area that can lead to conflict within the project. How might the elements of the contract be structured to help relieve communication problems?

  Determine the annual earnings on the released funds

Determine the amount of funds released by the lockbox arrangement.- The annual (pretax) earnings on the released funds.

  What is its net credit position

Its average daily sales are $3,300, and it collects accounts in 22 days. What is its net credit position?

  What is the reward-to-volatility ratio for the equity fund

You manage an equity fund with an expected risk premium of 13.2% and a standard deviation of 46%. The rate on Treasury bills is 4.6%. Your client chooses to invest $105,000 of her portfolio in your equity fund and $45,000 in a T-bill money market fun..

  Ira tax deferred contributions may be limited due

IRA tax deferred contributions may be limited due. At what interest rate do banks generally borrow and lend from one another in the overnight market?

  After researching different investments

You are the CFO of a large company and need to invest $10 million. After researching different investments, you have three different options.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd