The cost of using an existing asset: small appliances, inc., is considering starting a new line of business with the excess capacity it currently has on its rivet machine. the current machine is expected to last four years at the current rate of production. however, if a new line of business is taken on, then the machine will have to be replaced in three years instead of four. a new machine that will last four years would cost $50,000. what is the cost of taking on the new line of business? (round to the nearest dollar and assume a 9 percent cost of capital.)

This exercise illustrates that poor quality can affect schedules and costs. a manufacturing process has 130 customer orders to fill. each order requires one component part that is purchased from a supplier. however, typically, 3% of the components are identified as defective, and the components can be assumed to be independent. (a) if the manufacturer stocks 130 components, what is the probability that the 130 orders can be filled without reordering components? (b) if the manufacturer stocks 132 components, what is the probability that the 130 orders can be filled without reordering components? (c) if the manufacturer stocks 135 components, what is the probability that the 130 orders can be filled without reordering components?