A recently hired chief executive officer wants to reduce future production costs to Improve the company's...

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A recently hired chief executive officer wants to reduce future production costs to Improve the companys earnings, thereby I

business economics

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Answer 1

Answer #1

Let cost decrease by A per year from EOY 5 to EOY 15, then

98000 + 60000 * (P/A, 15%,4) = A *(P/A, 15%,11) * (P/F,15%,4)

98000 + 60000 * 2.854978 = A *5.233712 *0.571753

A = 269298.68 / 2.9923917 = 89994.46 ~ 89994

Pls comment if you think final solution is wrong or you require further explanation

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Answer 2

Answer #2

We have the present but the annul unknown , so A/P

answered by: Mohsen

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Answer 3

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