• Mu Technology is considering a cost reduction initiative:
  • Current annual costs: $1,000,000
  • Estimated cost reduction: 20%
  • Implementation costs: $50,000
  • Expected savings duration: 3 years

• Requirements:
  1. Calculate the expected annual cost reduction.
  2. Determine the payback period for the cost reduction initiative.
  3. Analyze the return on investment (ROI) for the initiative.
  4. Calculate the net present value (NPV) of the cost reduction project.
  5. Determine whether Mu Technology should proceed with the initiative based on the cost-benefit analysis.