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please using Excel Mid-Valley Industrial Extension Service, a state-sponsored agency, provides water quality sampling services to all business and industrial firms in a 10-county region.
please using Excel
Mid-Valley Industrial Extension Service, a state-sponsored agency, provides water quality sampling services to all business and industrial firms in a 10-county region. Last month, the service purchased all necessary lab equipment for full in-house testing and analysis. Now, an outsourcing company has offered to take over this function on a per-sample basis. Data and quotes for the two options have been collected. The MARR for government projects is 5% per year and a study period of 8 years is chosen. In-house: Equipment and supplies initially cost $125,000 for a life of 8 years, an AOC of $15,000, and annual salaries of $175,000. Sample costs average $25. There is no significant salvage value for the equipment and supplies currently owned. Outsourced: Cost averages $100 per sample for the first 5 years, increasing to $125 per sample for years 6 through 8. Determine the breakeven number of tests between the two options. The service director has asked the outsource company to reduce the per sample costs by 25% across the board over the 8 years. Will this increase or decrease the breakeven point? (Hint: Look carefully at your graph from the previous problem before answering.) Determine the breakeven point spreadsheet functions necessary to perform the analysis. Mid-Valley Industrial Extension Service, a state-sponsored agency, provides water quality sampling services to all business and industrial firms in a 10-county region. Last month, the service purchased all necessary lab equipment for full in-house testing and analysis. Now, an outsourcing company has offered to take over this function on a per-sample basis. Data and quotes for the two options have been collected. The MARR for government projects is 5% per year and a study period of 8 years is chosen. In-house: Equipment and supplies initially cost $125,000 for a life of 8 years, an AOC of $15,000, and annual salaries of $175,000. Sample costs average $25. There is no significant salvage value for the equipment and supplies currently owned. Outsourced: Cost averages $100 per sample for the first 5 years, increasing to $125 per sample for years 6 through 8. Determine the breakeven number of tests between the two options. The service director has asked the outsource company to reduce the per sample costs by 25% across the board over the 8 years. Will this increase or decrease the breakeven point? (Hint: Look carefully at your graph from the previous problem before answering.) Determine the breakeven point spreadsheet functions necessary to perform the analysisStep by Step Solution
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