Sunland’s manufacturing company can make 100 units of a necessary component part with the following costs: direct materials $12 direct labor 25000 variable overhead 55000 fixed overhead 3 if sunland’s manufacturing company can purchase the component externally for $185000 and only $8000 of the fixed costs can be avoided, what is the correct make-or-buy decision? make and save $1 buy and save $23000 buy and save $1 make and save $23000

Alyeska services company, a division of a major oil company, provides various services to the operators of the north slope oil field in alaska. data concerning the most recent year appear below: sales $18,000,000 net operating income $6,300,000 average operating assets $35,200,000 1. compute the margin for alyeska services company. (round your answer to 2 decimal places.) 2. compute the turnover for alyeska services company. (round your answer to 2 decimal places.) 3. compute the return on investment (roi) for alyeska services company. (round your intermediate calculations and final answer to 2 decimal places.)

Seattle bank’s start-up division establishes new branch banks. each branch opens with three tellers. total teller cost per branch is $96,000 per year. the three tellers combined can process up to 90,000 customer transactions per year. if a branch does not attain a volume of at least 60,000 transactions during its first year of operations, it is closed. if the demand for services exceeds 90,000 transactions, an additional teller is hired and the branch is transferred from the start-up division to regular operations. required what is the relevant range of activity for new branch banks

Shrieves casting company is considering adding a new line to its product mix, and the capital budgeting analysis is being conducted by sidney johnson, a recently graduated mba. the production line would be set up in unused space in the main plant. the machinery’s invoice price would be approximately $200,000, another $10,000 in shipping charges would be required, and it would cost an additional $30,000 to install the equipment. the machinery has an economic life of 4 years, and shrieves has obtained a special tax ruling that places the equipment in the macrs 3-year class. the machinery is expected to have a salvage value of $25,000 after 4 years of use. the new line would generate incremental sales of 1,250 units per year for 4 years at an incremental cost of $100 per unit in the first year, excluding depreciation. each unit can be sold for $200 in the first year. the sales price and cost are both expected to increase by 3% per year due to inflation. further, to handle the new line, the firm’s net working capital would have to increase by an amount equal to 12% of sales revenues. the firm’s tax rate is 40%, and its overall weighted average cost of capital, which is the risk-adjusted cost of capital for an average project (r), is 10%. define “incremental cash flow.” (1) should you subtract interest expense or dividends when calculating project cash flow?