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Sooner Manufacturing, Inc. is considering investing in a process improvement that would require an initial capital investment of $ 4 5 0 , 0 0
Sooner Manufacturing, Inc. is considering investing in a process improvement that would
require an initial capital investment of $ The projected increases in revenue over the
next six years are given in the table below.
a Sooner Manufacturing, Inc. can always leave the capital investment in the stock portfolio,
which is projected to yield pa over the next six years. What should the company do
b What is the breakeven rate of return between the process improvement and doing nothing?
c If the capital investment could be changed without changing the incremental revenues, what
capital investment changes this investment from being profitable not profitable to not profitable
profitable
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