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Will upvote if answered quickly X Company currently buys 7,000 units of a part each year from a supplier for $8.20 per part, but it
Will upvote if answered quickly
X Company currently buys 7,000 units of a part each year from a supplier for $8.20 per part, but it is considering making the part instead. It paid a consulting firm $16,000 to do the make/buy analysis. The consulting firm determined that X Company would have to buy equipment costing $150,000 to make the part. The equipment would last for six years, at which time it would have zero disposal value. The consulting company also estimated that it would cost X Company $24,950 a year to produce the 7,000 units. What is the approximate rate of return if X Company makes the part instead of buying it from the supplier? [Note: 0.01 means 1%, etc.) OA: 0.03|OB: 0.04 OC: 0.05| OD: 0.06| OE: 0.07| OF: 0.08 Submit Answer Tries 0/99Step by Step Solution
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