(Answered) Assume a division of hewlett-packard currently makes 12000

Finance

Assume a division of Hewlett-Packard currently makes 12,000 circuit boards per year used in producing diagnostic electronic instruments at a cost of $34 per board, consisting of variable costs per unit of $24 and fixed costs per unit of $10. Further assume Sanmina-SCI offers to sell Hewlett-Packard the 12,000 circuit boards for $34 each. If Hewlett-Packard accepts this offer, the facilities currently used to make the boards could be rented to one of Hewlett-Packard's suppliers for $46,000 per year. In addition, $6 per unit of the fixed overhead applied to the circuit boards would be totally eliminated.

Calculate the net benefit (cost) to HP of outsourcing the component from Samina-SCI. Use a negative sign with your answer, if appropriate.

View complete question

Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91796184
Price:- $10

Verified Expert

Priced at $20 Now at $10, Verified Solution

Have any Question?Write your Review or question?

Related Questions in Basic Finance

A suppose you purchase a 3-year zero-coupon bond with face

(a) Suppose you purchase a 3-year zero-coupon bond with face value of $1000 and a price of $850. What is the bond's yield? If you hold the bond to maturity, what will be your effective annual return? (b) Now suppose you ...

Common stock versus warrant investment tom baldwin can

Common stock versus warrant investment Tom Baldwin can invest $6,300 in the common stock or the warrants of Lexington Life Insurance. The common stock is currently selling for $30 per share. Its warrants, which provide f ...

Explain why a common stock should be evaluated in a

Explain why a common stock should be evaluated in a portfolio context as opposed to being evaluated in isolation.

Old xyz corp has total assets of 1000000 and a debt ratio

Old XYZ Corp has total assets of $1,000,000 and a debt ratio of 30%. Currently it has sales of $2,500,000, total fixed costs of $1,000,000, and EBIT of $50,000. If XYZ pays 6% interest on debt, what is XYZ's ROE?

Stock in the abc corporation was contributed to the london

Stock in the ABC Corporation was contributed to the London School of Economics and Business, a public school in the United Kingdom. The basis in the stock was $1,000, but its fair market value was $1,500 at the time of t ...

Assume that a firm could borrow 100 billion dollars the

Assume that a firm could borrow 100 billion dollars. The most straightforward value from the leveraged recapitalization that people would estimate is the present value of interest tax shield. Assume the cost of debt is 0 ...

Suppose that todays stock price is 3236 if the required

Suppose that today's stock price is $32.36. If the required rate on equity is 21.7% and the growth rate is 9.1%, compute the expected dividend (i.e. compute D1) Note: Enter your answer rounded off to two decimal points. ...

Really struggling with this question any help and insight

Really struggling with this question. Any help and insight is greatly appreciated. The current price of a 10-year, $1,000 par value bond is $1,158.91. Interest on this bond is paid every six months, and the simple annual ...

What is the number of shares that must be issued to the new

What is the number of shares that must be issued to the new investor in order for the investor to earn his target return?

A company has a capital structure of 39 debt 21 preferred

A company has a capital structure of 39% debt, 21% preferred equity and 40% common equity. The cost of debt financing is 3.25%, the cost of preferred equity financing is 7.38%, and the cost of common equity financing is ...

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

Recent Questions

Ask Basic Finance Expert