Home Automation is considering an investment of $500,000 in a new product line. The company will make
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Home Automation is considering an investment of $500,000 in a new product line. The company will make the investment only if it will result in a rate of return of 15% per year or higher. The revenue is expected to be between $138,000 and $165,000 per year for 5 years.
(a) Determine if the decision to invest is sensitive to the projected range of income using a PW analysis.
(b) Use a spreadsheet to determine the annual revenue required to realize 15% per year.
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