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Q7: Josh Ritchey has just been hired as a cost engineer by a large airlines company. Josh's fust idea is to stop giving complimentary cocktails,
Q7: Josh Ritchey has just been hired as a cost engineer by a large airlines company. Josh's fust idea is to stop giving complimentary cocktails, wine, and beer to the international flying public. He calculates this will save 6,000.000 drinks per year, and each drink costs $0.50, for a total of $3 million per year. Instead of complimentary chinks, Josh estimates that the airlines company can sell 2,000,000 drinks at $6.00 per chink. The net savings would amount to $15 million per year! Josh's boss really likes the idea and agrees to give Josh a lump-sum bonus now equaling 0.2% of the present equivalent worth of four years of net savings. If the company's MARK is 12% per year, what is Josh's bombs
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