Racer Industries is currently purchasing Part No$.76$ from an outside supplier for $$90$ per unit. Because of supplier reliability problems, the company is considering producing the part internally in an idle manufacturing plant. Annual volume over the next $6$ years is expected to total $290,000$ units at variable manufacturing costs of $$85$ per unit.

Racer must acquire $$90,000$ of new equipment if it reopens the plant. The equipment has a $6-$year service life, a $$15,000$ salvage value, and will be depreciated by the straight$-$line method. Repairs and maintenance are expected to average $$6,200$ per year in years $4-6,$ and the equipment will be sold at the end of its life.

Year FV of $$1$ at

$15\%$ FV of an ordinary annuity at $15\%$ PV of $$1$ at

$15\%$ PV of an ordinary annuity at $15\%$

$11\mathrm{.}1501\mathrm{.}0000\mathrm{.}8700\mathrm{.}870$

$21\mathrm{.}3232\mathrm{.}1500\mathrm{.}7561\mathrm{.}626$

$31\mathrm{.}5213\mathrm{.}4730\mathrm{.}6582\mathrm{.}283$

$41\mathrm{.}7494\mathrm{.}9930\mathrm{.}5722\mathrm{.}855$

$52\mathrm{.}0116\mathrm{.}7420\mathrm{.}4973\mathrm{.}352$

$62\mathrm{.}3138\mathrm{.}7540\mathrm{.}4323\mathrm{.}784$

Required:

Use the net$-$present$-$value method $($total$-$cost approach$)$ and a $15\%$ hurdle rate to determine whether Racer should make or buy Part No$.76.$ Ignore income taxes. $($Negative amounts should be indicated by a minus sign. Round your answers to the nearest dollar amount.$)$