Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

BKF.com provids banks accss to sophisticated financial information and analysis via th web, enabling them to instantly evaluat both personal and commercial loan applications. To

BKF.com provids banks accss to sophisticated financial information and analysis via th web, enabling them to instantly evaluat both personal and commercial loan applications. To btter focus on its client services, BKF.com is considering outsourcing som of its internal functions. Its controller, Jenny Le, suggests starting with the company's intrnal email system. She recntly attended a conference and learned that GTE and NBC outsourc their email function to companis such as Google and Yahoo. Lee bgan her analysis by identifying the total costs rlated to last month's in-house email opration when there were 3,595 employee mailboxes:

Variable Costs (varies with mailboxes)
Email licens $20,132
Virus protection licens 3,595
Miscellaneous 12,942
Fixed Costs
Computer hardwar 30,198
Total costs $66,867

Le analyzed the computer hardware costs, identifying its thre components:

  1. $13,891 were allocatd costs that will continue even if the email system is abandoned.
  2. $4,530 were non-personnel direct costs that will b avoided if the email system is abandoned.
  3. $11,777 were the monthly salaries for two, qually paid interns who worked only on the email system.

Mail.com, a lading provider of internet messaging outsourcing services, has offerd to host BKF.com's email function for $11.40 per mailbox. BKF.com will still need to pay th virus protection license fee and on of the interns to maintain the virus protection software.

A company has agred to pay BKF.com $3,000 a month to use the computer storage space that will becom available if BKF.com outsources its email function.

Finally, Lee stimates that 4,085 mailboxes will be required per month next year.

Q: By how much will BKF.com's monthly profits chang if they decide to outsource its email function to Mail.com instead of managing the servic internally? [Note: if the buy costs are lss than the make costs, enter the difference as a positiv number; if they make costs are less than the buy costs, enter the difference as a negative number, using the minus sign instad of parentheses.]

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Finance The Basics

Authors: Erik Banks

1st Edition

0415384575, 9780415384575

More Books

Students also viewed these Accounting questions

Question

2.1 Discuss what ethics means and the sources of ethical guidance.

Answered: 1 week ago

Question

8 What personal development is elearning good at providing?

Answered: 1 week ago

Question

7 What are the principles of action learning?

Answered: 1 week ago