posted by Ating .
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?
Engineering Economics -
sold its prescription drug business to Warner-Chilcott, Ltd. for $3.1 billion. If income from product sales is $2 billion per year and net profit is 20% of sales, what rate of return will the company make over a 10-year planning horizon?