The market for widgets is increasing by 15% per year
- anderson-university-south-carolina / ACCT 3020
- 18 Nov 2019
- Price: $20
- Other / Other
The market for widgets
is increasing by 15% per year from current profits of $2,000,000. Investing in
a design change will allow the profit per widget to stay steady; otherwise the
price will drop by 3% per year. If inflation in the economy is 4%, what is the
present worth in Year-1 dollars of the savings over the next 10 years? The
interest rate is 10%.