Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Josh Ritchey has just been hired as a cost engineer by a large airlines company. Josh?s first idea is to quit giving complimentary cocktails, wine,
Josh Ritchey has just been hired as a cost engineer by a large airlines company. Josh?s first idea is to quit giving complimentary cocktails, wine, and beer to the international flying public. He calculates this will save 5,100,000 drinks per year, and each drink costs $0.40, for a total of $2.04 million per year. Instead of complimentary drinks, Josh estimates that the airlines company can sell 1,800,000 drinks at $5.00 per drink. The net savings would amount to $11.04 million per year! Josh?s boss really likes the idea and agrees to give Josh a lumpsum bonus now equaling 0.11% of the present equivalent worth of two years of net savings. If the company?s MARR is 15% per year, what is Josh?s bonus
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started