8 pt X Company currently buys 7,500 units of a part each year from a supplier fo

Question

8 pt X Company currently buys 7,500 units of a part each year from a supplier for $8.50 each, but it is considering making the part instead. In order to make the part, X Company will have to buy equipment that will cost $150,000. The equipment will last for 6 years, at which time it will have zero disposal value. X Company estimates that it will cost $33,240 a year to make the 7,500 units. What is the approximate rate of return if X Company makes the part instead of buying it from the supplier? 11. AO 0.03 BO 0.04 0.05 DO 0.06 EO 0.07 FO 0.08

Explanation / Answer

Accounting refers to the systematic process of identifying, recording, measuring, classifying, verifying, processing, summarizing, interpreting and communicating financial information about economic entities such as corporations and businesses.

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