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One of your Taiwanese suppliers has bid on a newline of molded plastic parts that is currently being assembled at your pl ant The supplier

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One of your Taiwanese suppliers has bid on a newline of molded plastic parts that is currently being assembled at your pl ant The supplier has bid $0.10 per pad. given a forecast you provided of 300.000 parts in year 1; 400.000 In year 2. and 700,000 In year 3. Shipping and handling of parts from the supplier's factory ls estimated at $0.01 per unit. Addltlonal Inventory handling charges should amount to $0.006 per unit. Finally. administrative costs are estimated at $30 per month. Although your plant ls able to continue producing the part. the plant would need to invest In another molding machine. which would cost 520.000. Direct materials can be purchased for $0.06 per unit Dlrect labor is estimated at $0 04 per unit {or wages plus a 50 percent surcharge for benets and, Indirect labor ls estimated at $0 008 per unit plus 50 percent benefits. Up-front englneering and design costs will amount to $30,000. Finally. management has lnslsted that overhead be allocated if the parts are made ill-house at a rate ol100 percent of direct labor wage costs. The rm uses a cost of capital of 15 percent per year. 1. Calculate the difference in NW5 between the Make and Buy options. Express all costs as positive values in your calculations, it is suggested to use the NW function in Excel. {Do not round intermediate calculations. Round your answer to 2 decimal places.) . l; clamhooaahpleubutnotontlnlyoonect. _'

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