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Your company is considering investing in a process improvement that would require an initial capital investment of $300 K. The projected revenue over the next
Your company is considering investing in a process improvement that would require an initial capital investment of $300 K. The projected revenue over the next five years are as follows:
Year | Revenue ($K) |
1 | 90 |
2 | 90 |
3 | 90 |
4 | 90 |
5 | 90 |
The company can always leave the capital investment in the stock portfolio, which is projected to yield 10% p.a. over the next five years.
Should the company invest this amount ($300 K) in the process improvement or leave it in the stock portfolio?
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