unity cost to be 12% per year compound annually. This lucky company pays no taxes. Are the profits from the new customers worth the training and salary costs of the new hire? a.) what is the appropriate discount rate to use for this analysis? b.)what is the total PV of the new customers gained in a single year? c.)what is the value today of the salary cost?
Your sales force is asking for more administrative support. You have estimated you can hire a new person in this role at an all in cost of $30 per hour for 180 hrs per month. the upfront hiring and training expense is $5000 now. You have 3 sales people, and are guessing each sales logistics. Assume each customer acquired has an estimated total lifetime value (at the time of closing the new sale) of $1000 in profits. You have been asked to consider only 1 year in sales in making this decision ( the average turnover of these positions is once per year). Assume the company considers its
a.) what is the appropriate discount rate to use for this analysis?
b.)what is the total PV of the new customers gained in a single year?
c.)what is the value today of the salary cost?
d.)would you recommend makin the hire?
e)maximum you'd be willing to pay in training cost?
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