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Samsung Electronics is trying to reduce supply chain risk by making more responsible make - buy decisions through improved cost estimation. A high - use

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Samsung Electronics is trying to reduce supply chain risk by making more responsible
make-buy decisions through improved cost estimation. A high-use component
(expected usage is 5000 units per year) can be purchased for $25 per unit with delivery
promised within a week. Alternatively, Samsung can make the component in-house
and have it readily available at a cost of $5 per unit, if equipment costing $150,000 is
purchased. Labor and other operating costs are estimated to be $35,000 per year over
the study period of 5 years. Salvage is estimated at 10% of first cost and i=12% per
year. What is the breakeven quantity?
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