6 Emil Manufacturing incurs unit costs of $7.5o (S4.50 variable and $3 fixed) in making a sub- assembly part for its finished product. A supplier offers to make 10,000 of the assembly part 55 per unit. If the offer is accepted, Emil will save all variable costs but no fixed costs. Prepare an analysis showing the total cost saving, if any, Emil will realize by buying the part and whether the part should be made or bought. Buy Inerease (Dec) Make Costs- Variable Mfg Costs-Fixed Mfg Purchase Price Total Annual Cost Marcus Company is considering purchasing new equipment for $450,000. It is expected that the equipment will produce net annual cash flows of $55,000 over its 10-year useful life. Compute the cash payback period 37. 38. A 10-year project is estimated to cost $330,000 and have no residual value. The expected annual net income is $11,550. Determine the average rate of return. 39. The net present value has been computed for Proposals P and Q. Relevant data are as follows: Proposal P Proposal Q S190,800 $484,500 S180,000 $475,000 9,500 Present value of net cash flows Initial Investment Net present value 10,800 Determine the present value index for each proposal and identify the more desirable project. Proposal P: Proposal