What is the approximate rate of return

Assignment Help Accounting Basics
Reference no: EM133062751

Question - X Company currently buys 8,000 units of a part each year from a supplier for $8.00 per part, but it is considering making the part instead. It paid a consulting firm $14,000 to do the make/buy analysis. The consulting firm determined that X Company would have to buy equipment costing $150,000 to make the part. The equipment would last for six years, at which time it would have zero disposal value. The consulting company also estimated that it would cost X Company $34,450 a year to produce the 8,000 units. What is the approximate rate of return if X Company makes the part instead of buying it from the supplier?

Reference no: EM133062751

Questions Cloud

What is the free cash flow : If the firm issued $779 of new debt and repaid $1,179 of existing debt, what is the free cash flow to the equity holders (FCFE) of the firm?
Determine the effect of the change : Determine the effect of the change and prepare the appropriate journal entry to record Bronson's income tax expense in 2021
Describe the abilene paradox : Using your own words, how would you describe the Abilene Paradox?
What is schumi average daily credit sales : The Schumi Corporation's accounts receivable turnover ratio last year was 4.3 If Schumi has a accounts receivable balane of $90000
What is the approximate rate of return : What is the approximate rate of return if X Company makes the part instead of buying it from the supplier
Penetration testing techniques : Do a bit of research on penetration testing techniques. Advantages and disadvantages of each. Possible negative implications of penetration tesing.
Calculate the margin of safety in both revenues and units : Calculate the number of units that must be sold to achieve a target after-tax income of $120,00, Calculate the margin of safety in both revenues and units
Develop computer-internet security policy : You have been hired as the CSO (Chief Security Officer) for an organization. Your job is to develop a computer and internet security policy for the organization
Determining the capital market line : The Capital Market Line: Using the mean returns and standard deviations you calculated in question 1, plot the market index and the two stocks on an expected re

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

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