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Use the Following Information to Answer the Question(s)below

question 94

Multiple Choice

Use the following information to answer the question(s) below.
Galt Motors currently produces 500,000 electric motors a year and expects output levels to remain steady in the future.It buys armatures from an outside supplier at a price of $2.50 each.The plant manager believes that it would be cheaper to make these armatures rather than buy them.Direct in-house production costs are estimated to be only $1.80 per armature.The necessary machinery would cost $700,000 and would be obsolete in 10 years.This investment would be depreciated to zero for tax purposes using a 10-year straight line depreciation.The plant manager estimates that the operation would require additional working capital of $40,000 but argues that this sum can be ignored since it is recoverable at the end of the ten years.The expected proceeds from scrapping the machinery after 10 years are estimated to be $10,000.Galt Motors pays tax at a rate of 21% and has an opportunity cost of capital of 14%.
-The NPV of manufacturing the armatures in-house is closest to:

Comprehend the process of selecting an outsourcing partner, including the importance of reference checks and quality assurance.

Understand the concept of competencies as sources of competitive advantage and how outsourcing affects organizational competencies.

Understand what HR functions are most commonly outsourced and why.

Recognize the trend of outsourcing as a significant strategy in reshaping management.

Definitions:

Monkeys

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A mental health condition triggered by experiencing or witnessing a terrifying event, characterized by flashbacks, nightmares, and severe anxiety.

Generalised Anxiety Disorder

A mental health condition marked by persistent and excessive worry about various aspects of life, often to the point of interference with daily activities.

Conversion Disorder

A psychological disorder characterized by symptoms such as blindness, paralysis, or other issues related to the nervous system that medical assessments cannot account for.