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 remembers the estimated unit sales price was $200 and the target unit cost was $195. Sales were projected at 100,000 units with a required $5,000,000 investment.
Instructions
Compute the required minimum rate of return.

Question

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The Answer of 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 remembers the estimated unit sales price was $200 and the target unit cost was $195. Sales were projected at 100,000 units with a required $5,000,000 investment.
Instructions
Compute the required minimum rate of return.