1 Assuming The Company Has No Alternative Use For The Facilities That Are Now Being 2783220

1. Assuming the company has no alternative use for thefacilities that are now being used to produce the carburetors, whatwould be the financial advantage (disadvantage) of buying 22,000carburetors from the outside supplier? 2. Should the outsidesupplier’s offer be accepted? 3. Suppose that if the carburetorswere purchased, Troy Engines, Ltd., could use the freed capacity tolaunch a new product. The segment margin of the new product wouldbe $220,000 per year. Given this new assumption, what would befinancial advantage (disadvantage) of buying 22,000 carburetorsfrom the outside supplier? 4. Given the new assumption inrequirement 3, should the outside supplier’s offer be accepted?

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