Larkspur company is considering two capital investment proposals. estimates regarding each project are provided below: project soup project nuts initial investment $4 $6 annual net income 24000 4 net annual cash inflow 102000 125000 estimated useful life 5 years 6 years salvage value 0 0 the company requires a 10% rate of return on all new investments. present value of an annuity of 1 periods 9% 10% 11% 12% 5 3.89 3.791 3.696 3.605 6 4.486 4.355 4.231 4.111 the annual rate of return for project soup is

Galwaysc electronics makes two products. model a requires component a and component c. model b requires component b and component c. new versions of both models are released each year with updated versions of all components. all components are sourced overseas, and abc contracts annually for a quantity of each component before seeing that year’s demand. components are only assembled into finished products once demand for each model is known. for the coming year, alwaysc’s purchasing manner has proposed ordering 500,000 units of component a, 630,000 of component b, and 1,000,000 units of component c. her boss has asked why she has recommended purchasing so much of components a and b when alwaysc will not have enough of component c to fully use all of the inventory of a and b. what factors might the purchasing manager cite to explain her recommended order? explain your reasoning.