Homework Help: Engineerin Economics

Posted by Atem on Wednesday, February 9, 2011 at 10:50pm.

Sensotech Inc., a maker of microelectromechanical systems, believes it can reduce product recall by 10% if it purchases new software for detecting faulty parts. the cost of the new software is $$ 225000.

1- how much would the company have to save each year for 4 years to recover its investment if it uses a minimum attractive rate of return of 15% per year?

2-What was the cost of recalls per year before the software was purchased if the company did exactlyy recover its investment in 4 years from the 10% reduction?

Help please

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