Edward currently manufactures a subcomponent that is used in its main product. A supplier has offered to supply all the subcomponents needed at a price of $22. Edward currently produces 100,000 subcomponents at the following manufacturing costs: 
a. If Edward has no alternative uses for the manufacturing capacity, what would be the profit impact of buying the subcomponents from the supplier?
b. If Edward has no alternative uses for the manufacturing capacity, what would be the maximum price per unit they would be willing to pay the supplier?
c. Now assume Edward would avoid $300,000 in equipment leases and salaries if the subcomponent were purchased from the supplier. Now what would be the profit impact of buying from the supplier?
Definitions:
Efficient
The characteristic of being able to accomplish a task or function with the minimum waste of time and effort; effectiveness combined with resourcefulness.
Capital Market History
The historical trends and events involving the trading of securities, affecting the structure and behavior of the capital market.
Bearing Risk
The action or practice of assuming the potential for loss or danger in a financial operation or investment.
Dollar Return
The total amount of money gained or lost on an investment, expressed in dollars.
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