ager is considering the following two quotes from two vendors for purchace and maintanance of an lor X's estimates are all in actual dollars, while Vendor Y's estimates are all in year-zero dollars. Vendor X Vendor Y Initial cost $9,200 $11,700 Annual cost $4,900 $4,000 Service life (yrs) 10 10 Salvage value $3,680 $4,680 es a before-tax real interest rate of 8% per year for economic analysis. If inflation rate is expected to average over the next ten years, which vendor should the manager select that will minimize the before-tax cost ... I for each alternative (use negative sign for costs) or X's estimates is $ (Round to the nearest whole number.) or Y's estimates is $ (Round to the nearest whole number.) onomical alternative is

ager is considering the following two quotes from two vendors for purchace and maintanance of an lor X's estimates are all in actual dollars, while Vendor Y's estimates are all in year-zero dollars. Vendor X Vendor Y Initial cost $9,200 $11,700 Annual cost $4,900 $4,000 Service life (yrs) 10 10 Salvage value $3,680 $4,680 es a before-tax real interest rate of 8% per year for economic analysis. If inflation rate is expected to average over the next ten years, which vendor should the manager select that will minimize the before-tax cost ... I for each alternative (use negative sign for costs) or X's estimates is $ (Round to the nearest whole number.) or Y's estimates is $ (Round to the nearest whole number.) onomical alternative is

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter8: Cost Analysis

Section: Chapter Questions

Problem 8E

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A firm has received an order from customer X to be executed for RO1,800 ( all inclusive). The order requires the following materials, labour etc. Materials Requirements In stock Book value Replacement cost per kg Realizable value per kg A 100kg 50kg RO 250 RO 7 RO 3 B 300kg 140kg RO 280 RO 3 RO 1 Labour: Department I : 10 hrs @ RO15 Department II : 8 hrs @ RO12 Variable Overhead : RO 150 Material A is regularly used by the firm and if used on this order has to be replaced for the use of other orders. Material B has no use and is the result of excessive purchase made for an order executed two years ago. Labour in department I is available for this order but labour in department II is fully engaged on another order which is earning a contribution of RO 20 per hour and if the order from X is to be executed, labour in department II has to be diverted from current operations. State whether the order received from customer X has to accepted.
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