Harmony Auto Group sells and services imported and domestic cars. The owner wants to evaluate the option of outsourcing all of its new auto warranty service work to Winslow, Inc., a private repair service that works on any make and year car. Either a 5-year contract basis or 10-year license agreement is available from Winslow. Revenue from the manufacturer will be shared with no added cost incurred by the car/warranty owner. Alternatively, Harmony can continue to do warranty work in-house for the foreseeable future. Use the estimates made by the Harmony owner to perform an annual worth evaluation at 10% per year to select the best option. Monetary values are in $ million units.
What will be an ideal response?
AW contract = -1 + 2.5
= $1.5 ($1,500,000)
AW license = -2(A/P,10%,10) - 0.2 + 1.3
= -2(0.16275) + 1.1
= $0.7745 ($774,500)
AW in-house = -20(0.10) – 4 + 8
= $2.0 ($2,000,000)
Select in-house alternative
You might also like to view...
Explain the importance of complete and accurate documentation and how it is achieved.
What will be an ideal response?
Jill’s children have a large pumpkin patch. The patch had 750 pumpkins; 45 percent were large pumpkins selling for $3.25 each, 38 percent were small pumpkins selling for $1.99 each, and the rest were fed to the pigs.
a. How many pumpkins were fed to the pigs? b. How many large pumpkins were sold? c. What income was received from the sale of the pumpkins? d. What was the average price per pumpkin? (Note: Do not forget to count the ones the pigs ate.)
Calculate the thermal resistance due to convection for the following situations:
(a) warm water with h = 200 W/m^2·K (b) warm air with h = 10 W/m^2·K (c) warm moving air (windy situation) h = 30 W/m^2·K
Most recently manufactured diesel engines feature what type of fuel subsystem priming?
A. Mechanical priming. B. Self-purging. C. Quick-priming. D. Self-priming.