Mellie Computer Devices Inc. is considering the introduction of a new printer. The company's accountant had prepared an analysis computing the target cost per unit but misplaced his working papers. From memory he remember the estimated until sales price was $200 and the target unit cost was $195. Sales were projected at 200,000 unit with a required 5,000,000 investment.
Instructions:
Compute the required minimum rate of return .
Sales
Less target cost
Desired ROI (in dollars)
Investment
Minimum ROI