Reference no: EM131939800

Consider again the choice between outsourcing and in-house assembly of HomeNet discussed in Section 8.3 and analyzed in Table 8.6, Suppose, however, that the upfront cost to set up for in-house production is $ 6.1 million rather than $5 million, and the cost per unit for in-house production is expected to be $ 93 rather than $95. (Note: the in-house production will represent a decrease of $620,000 in net working capital.). Suppose the outside supplier decides to raise its price above $110/unit. At what cost per unit for the outsourced units would HomeNet be indifferent between outsourcing and in-house assembly? b. Alternatively, suppose the cost for outsourcing remains $110/unit, but expected demand increases above 100,000 units per year. At what level of annual sales, in terms of units sold, would HomeNet be indifferent between these two options a. Suppose the outside supplier decides to raise its price above $110/unit. At what cost per unit for the outsourced units would HomeNet be indifferent between outsourcing and in-house assembly As shown in Table 8.6, LOADING..., the cost of outsourcing has an NPV of negative $ −$19,510. Calculate the free cash flows of in-house assembly, given the $6.1 million setup and $93/unit assembly cost: (Round to the nearest integer.)