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Your company is trying to determine whether to spend $500,000 in process improvements.The projected savings increase in time as given in table 1.The alternative is
Your company is trying to determine whether to spend $500,000 in process improvements.The projected savings increase in time as given in table 1.The alternative is to do nothing and leave the $500,000 in investments earning interest.What interest rate is required in the investments for the better choice to be to do nothing?
Table 1. Savings obtained from $500,000 investment.
Year | Savings ($) |
1 | 25,000 |
2 | 75,000 |
3 | 100,000 |
4 | 125,000 |
5 | 250,000 |
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