question archive A large manufacturing firm can procure one equipment item from two suppliers -firm (A) and firm (B)
A large manufacturing firm can procure one equipment item from two suppliers -firm (A) and firm (B)
Subject:EconomicsPrice: Bought3
A large manufacturing firm can procure one equipment item from two suppliers -firm (A) and firm (B). Approximately 100,000 unites of the equipment are need. Estimates for vendors A and B are given for each unit.
Firm A Firm B Initial
Cost -18,000 -23,000
Annual Cost -13,500 -4,600
Annual income 15,000 6,000
Salvage value 2000 3,000
Life span 15 10
Use the rate of return method to determine which vendor should be selected.
