What is the npv of savings from outsourcing

Assignment Help Financial Management
Reference no: EM132037433

DMW, a German auto manufacturer, is considering the sourcing of certain components from India. The firm estimates a requirement of 150,000 units a year. The component is currently manufactured in- house at a cost of EUR 30. The Indian firm offers a four- year agreement to manufacture this component for rupee (INR) 1,500 per unit. The German firm also bears shipping costs of EUR 3 per component. Assume a discount rate of 9 percent. Spot EURINR equals 65. What is the NPV of savings from outsourcing?

Reference no: EM132037433

Questions Cloud

What was the average real return on crash-n-burn stock : What was the average real return on Crash-n-Burn's stock?
The impact of personal data protection act : what are ways to manage the impact of Personal Data Protection Act 2010 on banking industry?
What is the yield to maturity : A bon with value of 1,000 has 16 years until maturity, carries a coupon rate of 5.8%, and sells for 1,109. What is the Yield to maturity?
Calculate the past growth rate in earnings : The Bouchard Company's EPS was $5.39 in 2016, up from $3.08 in 2011. The company pays out 50% of its earnings as dividends, and its common stock sells for $31.
What is the npv of savings from outsourcing : Assume a discount rate of 9 percent. Spot EURINR equals 65. What is the NPV of savings from outsourcing?
Considering the purchase of new machine for project : You are considering the purchase of a new machine for a project. Details of this potential purchase are provided below.
Determine income on an accrual basis : a. Determine income on an accrual basis. b. Determine income on a cash basis.
The installation of the new sprinkler system : The golf professional believes that with the installation of the new sprinkler system the club will see new members joining and golf shop revenues increasing.
Massachusetts municipal bond offering a quoted yield : Ye Yuan is in retirement and is considering investing in one of the following two money market securities:

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

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