Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

X Company currently buys 6,000 units of a part each year from a supplier for $8.20 per part, but it is considering making the part

image text in transcribed

X Company currently buys 6,000 units of a part each year from a supplier for $8.20 per part, but it is considering making the part instead. In order to make the part, X Company will have to buy equipment that will cost $150,000. The equipment will last for 6 years, at which time it will have zero disposal value. X Company estimates that it will cost $21,510 a year to make all 6,000 units. What is the approximate rate of return if X Company makes the part instead of buying it from the supplier? [Note: 0.03 means 3%, etc.] OA: 0.03 OB: 0.04 OC: 0.05 OD: 0.06 OE: 0.07 OF: 0.08 Le Trior 10

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Horngrens Accounting Volume 1

Authors: Tracie Miller Nobles, Brenda Mattison, Ella Mae Matsumura, Carol Meissner, JoAnn Johnston, Peter Norwood

11th Canadian Edition

0135359708, 9780135359709

More Books

Students also viewed these Accounting questions

Question

2.3 Define human resource ethics.

Answered: 1 week ago

Question

9 How can training be evaluated?

Answered: 1 week ago