FairLinks Golf Corporation manufactures golf clubs, balls, and other equipment. The companys latest design for a driver, the Annihilator, caught the attention of several PGA Tour professionals, who raved about its performance publicly (without an endorsement deal in place). The driver, made of vibranium, is lighter than any other driver on the market but generates more force for the average golfer than its counterparts.

At the beginning of the year, FairLinks management team developed the following master budget for the Annihilator line:

Master Budget
Annihilator
Sales (# of clubs)			5,000
Sales price per club			$280
Material costs:
	Vibranium	1,000 grams @ $0.06 per gram	$60
	Graphite shaft	1 per club @ $8	$8
	Rubber grip	1 per club @ $10	$10
Labor costs:
	3 hours @ $20/hr		$60
Fixed costs (for the year)			$250,000

After seeing these numbers, the companys CEO Cheryl Ford wondered if there was a way to increase profit from the exciting new line and capitalize on the momentum it had gained in the golfing community. She had two ideas: 1) reduce the selling price to $245, which she believed would substantially increase sales, or 2) rent a new grinding machine for the coming year. The rental would cost $50,000 for the year, but would hopefully reduce materials waste and labor time associated with making each Annihilator. That is, since each one weighed just 350 grams, Cheryl wanted to find a way to reduce the 650 grams (1,000 350) of vibranium and other materials that were wasted in the production process, and that doing so would also reduce the time needed to fabricate each club.

Cheryl implemented both ideas, and at the end of the year, the actual results were as follows:

Actual Results
Annihilator
Sales (# of clubs)			5,600
Sales price per club			$245
Material costs:
	Vibranium	700 grams @ $0.06 per gram	$42
	Graphite shaft	1 per club @ $8	$8
	Rubber grip	1 per club @ $12	$12
Labor costs
	2.5 hours @ $20/hr		$50
Fixed costs (for the year)			$300,000

Given the preceding information, answer the following:

1. If Cheryls company could make improvements to their production process to increase the efficiency of their material use, roughly how much should they be willing to pay for those improvements? Admittedly there is no single right answer here and you may need to make an assumption or two I just want you to think about what the inefficiencies are costing the company and what they may be willing to do to eliminate them.