Kirkland company manufactures a part for use in its production of hats. When 10,000 items are produced, the costs per unit are:

Direct material	$0.60
Direct manufacturing labor	$3.00
Variable manufacturing overhead	$1.20
Fixed manufacturing overhead	$1.60
Total	$6.40

Mike Company has offered to sell to Kirkland Company 10,000 units of the part for $6.00 per unit. The plant facilities could be used

to manufacture another item at a savings of $9,000 if Krikland accepts the offer. In addition, $1.00 per unit of fixed manufacturing

overhead on the orginal item would be eliminated.

What is the net present value of the buy decision with a discounted rate of 3%