Operations Management

The estimated annual wages and salaries for the next five years of Miller Corporation are Rs. 4, 6, 8, 10, 12 lakhs. The ARR (accounting rate of return) of the company for the current and proceeding 4 years is 25, 20, 15, 12, and 10 and the ARR of all the firms in the chemical industry for the corresponding period is 20, 15, 12, 10 and 9 resp. Assume the discount rate is 10%. Calculate the efficiency ratio using Hermanson's Approach.