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Hudson University has just received a proposal from Speak and Tell (S&T), a New York public relations firm. Under the terms of the proposal, S&T

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Hudson University has just received a proposal from Speak and Tell (S&T), a New York public relations firm. Under the terms of the proposal, S&T has offered to meet all of the university's external media relations needs at a fixed cost of $750,000 per year. These activities are currently performed by Hudson staff. The expenses associated with the media relations department during the current year were as follows: Staff salaries: $650,000 including a senior staff member who is paid S80,000 and who will remain on staff to oversee the university's interests in 4-35. dealings with the public relations firm. All other staff would be let go. The university incurs additional costs for healthcare and other benefits at a rate of 30 percent of staff salaries. Fixed equipment: The computers and media equipment in the department were purchased 4 years ago. They cannot be used by any other department at on and cannot be sold. Depreciation expenses from the equipment are $20,000 per year. The net book value of the equipment is $60,000. Printing costs: If the university contracts out it will no longer have to print 1 Which of the costs listed above should be included in Hudson's Based solely on financial considerations, should Hudson accept the external media documents, which cost $150,000 this year. consideration of the proposal? Why should they be included? 2. contract? Why

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