Reference no: EM132986407
Question - Bushra Company's three assembly plants are located in Abu Dhabi, Dubai and Sharjah. Previously, the company purchased a major subassembly, which becomes part of the final product from an outside firm. Bushra has decided to manufacture the subassemblies within the company and must now consider whither to rent one centrally located facility for example in Dubai, where all the subassemblies would be manufactured or to rent three separate facilities, each located near one of the assembly plants, where each facility would manufacture only the subassemblies needed for the nearby assembly plant.
A single, centrally located facility, with a product capacity of 18,000 units per year, would have fixed costs of AED. 900,000 per year and a variable cost of AED. 250 per unit. Three separate decentralized facilities, with product capacities of 8,000, 6,000 and 4,000 units per year, would have fixed costs of AED. 475,000, AED. 425,000 and AED. 400,000 respectively and variable costs per unit of only ED. 225 per unit, owing primarily to the reduction in shipping costs. The current product rates at the three assembly plants are 6,000. 4,500 and 3,000 units respectively.
Required -
1. Assuming that the current production rates are maintained at the three assembly plants, which alternative should management select and why?
2. If demand for the final product were to increase to production capacity, which alternative would be more attractive? What additional information would be useful before making a decision?
3. Discuss the issues on how to analyze economies of scale, diseconomies of scale, economies of scope, and cost complementarities, and how each affects the cost of production with good examples.
What is the current yield for bond p and bond d
: If interest rates remain unchained, what is the expected capital gains yield over the next year for Bond P and Bond D? What is the current yield for Bond P?
|
What is the market value of kurz existing assets
: Kurz plans to announce that it will borrow $50 million and use the funds to repurchase shares. What is the market value of Kurz existing assets
|
Compute what is the expected capital gains yield
: Compute What is the expected capital gains yield? Discuss the relationship among the various returns that you find for each of these stocks.
|
Do think the model for stock valuation is appropriate
: The company has just paid a dividend of $.70 per share, as it has for the previous three quarters. What is your value for the current share price now?
|
Discuss the issues on how to analyze economies of scale
: Discuss the issues on how to analyze economies of scale, diseconomies of scale, economies of scope, and cost complementarities
|
Calculate the values for the? currency-to-deposit ratio
: Calculate the values for the? currency-to-deposit ratio, the ratio of total reserves to? deposits, the monetary? base, the M1 money? multiplier
|
What is the controlling interest share
: The subsidiary achieved $80,000 of net income in 2019 and $40,000 2020. What is the Controlling interest share in the subsidiary's profits of 2019
|
Do positive chamctenbased leaders still exist
: Do positive chamctenbased leaders still exist? Recent scandals involving political, business, and religious ?gures highlight the need to consider values and eth
|
Prepare the necessary adjusting entries at december
: Prepare the necessary adjusting entries at December 31, 2011, for the Microchip Company for each of the situations. Depreciation on machinery is $2400 for years
|