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Compute a cash flow analysis of the incremental costs of outsourcing versus the status quo. This can be done in two ways: Calculate gross costs
- Compute a cash flow analysis of the incremental costs of outsourcing versus the status quo. This can be done in two ways:
- Calculate gross costs under the status quo, and gross costs if Lee outsources, and then take the difference.
- Focus on the differences between status quo and gross costs.
- Compute the net present value of outsourcing based on a cost of capital rate of 12%/year.
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