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Chemco Enterprises is the manufacturer of Ultra-Dry, a hydrophobic coating that will waterproof anything. Over a 5-year period, the costs associated with the pilot test product line were as follows: first cost of $40,000 and annual costs of $18,000. Annual revenue was $37,000 and used equipment was salvaged for $4,000. What rate of return did the company make on this product? The rate of return the company made on the product is 59 %.

Chemco Enterprises is the manufacturer of Ultra-Dry, a hydrophobic coating that will waterproof anything. Over a 5-year period, the costs associated with the pilot test product line were as follows: first cost of $40,000 and annual costs of $18,000. Annual revenue was $37,000 and used equipment was salvaged for $4,000. What rate of return did the company make on this product? The rate of return the company made on the product is 59 %.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter8: Cost Analysis
Section: Chapter Questions
Problem 1.1CE
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Chemco Enterprises is the manufacturer of Ultra-Dry, a hydrophobic coating that will waterproof anything. Over a 5-year period, the costs associated with the pilot test product line were as follows: first cost of $40,000 and annual costs of $18,000. Annual revenue was $37,000 and used equipment was salvaged for $4,000. What rate of return did the company make on this product? The rate of return the company made on the product is 59 %.
Transcribed Image Text:Chemco Enterprises is the manufacturer of Ultra-Dry, a hydrophobic coating that will waterproof anything. Over a 5-year period, the costs associated with the pilot test product line were as follows: first cost of $40,000 and annual costs of $18,000. Annual revenue was $37,000 and used equipment was salvaged for $4,000. What rate of return did the company make on this product? The rate of return the company made on the product is 59 %.
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