Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

ABC Company is considering replacing a metal gear with a plastic one. The plastic gear will save $0.75 per unit but will require an expenditure of $40,000 for special tooling (each year) to produce the gear. Annual sales are 80,000 units.

A. Should the company convert to the plastic gear? What is the expected financial impact?
B. Suppose that the plastic gear creates additional warranty cost due higher failure rates. During the first year the gear is in service (warranty period) there will be two additional failures for every 1,000 gears sold. The cost to the company is $50 per gear failure. Should the company still convert to the plastic gear? What is the expected financial impact?

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M924323

Have any Question? 


Related Questions in Basic Finance

The domestic and international financial marketplace topic

The domestic and international financial marketplace. Topic include financial markets, types of financial intermediaries, the form and methods of stock market operation, the stock market, multinational corporation, forei ...

Discussion performance measurement managing finance-both

Discussion Performance Measurement Managing Finance- Both the Genesis Energy and Sensible Essentials teams believe that the client engagement was very successful. All the critical learning tools were fully explored. Howe ...

Define a data management planprovide an example of good

Define a data management plan? Provide an example of good data and an example of bad data. Explain the following: Other than collecting primary data where might you search for secondary data?

Directions read carolina blues credit report on the

Directions: Read Carolina Blue's credit report on the following pages. Carolina is seeking a bank loan to purchase a new vehicle. Analyze Carolina's credit report and answer the following questions to determine if Caroli ...

Assume that the production of cement also produces a

Assume that the production of cement also produces a substantial amount of air pollution and that a technology is available that can lower the pollution but with somewhat higher production costs for the cement. Because o ...

Evaluate sokols conduct and determine which if any of the

Evaluate Sokol's conduct and determine which, if any, of the CFA Institute Standards of Professional Conduct are applicable. For each applicable Standard, determine whether conduct complied with or violated the Standard. ...

Fed policy focused on long-term interest rates why might

Fed Policy Focused on Long-term Interest Rates: Why might the Fed want to focus its efforts on reducing long-term interest rates rather than shortterm interest rates during a weak economy? Explain how it might use a mone ...

Suppose you are a senior fund manager with a large

Suppose you are a senior fund manager with a large investment company. You are a proponent of the Efficient Market Hypothesis (EMH) and you are an advocate of the use of the Capital Asset Pricing Model (CAPM), the single ...

Using the loanable funds theory show in a graph how each of

Using the loanable funds theory, show in a graph how each of the following events affects the supply and demand for loans and the equilibrium real interest rate: a. A war leads the government to increase spending on the ...

Cross-border mergers are a useful means of overseas

Cross-border mergers are a useful means of overseas expansion for multinational enterprises (MNEs). What are cross-border mergers? What are the circumstances under which MNEs internationalise using cross-border mergers? ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

A cola-dispensing machine is set to dispense 9 ounces of

A cola-dispensing machine is set to dispense 9 ounces of cola per cup, with a standard deviation of 1.0 ounce. The manuf

What is marketingbullwhat is marketing think back to your

What is Marketing? • "What is marketing"? Think back to your impressions before you started this class versus how you

Question -your client david smith runs a small it

QUESTION - Your client, David Smith runs a small IT consulting business specialising in computer software and techno

Inspection of a random sample of 22 aircraft showed that 15

Inspection of a random sample of 22 aircraft showed that 15 needed repairs to fix a wiring problem that might compromise

Effective hrmquestionhow can an effective hrm system help

Effective HRM Question How can an effective HRM system help facilitate the achievement of an organization's strate