Determine the expected rate of return per quarter/ Econometrics
ASM International, an Australian steel company, claims that a savings of 40% of the cost of stainless steel threaded bar can be achieved by replacing machine threads with precision weld depositions. A U.S. manufacturer of rock bolts and grout-in fittings plans to purchase the equipment. A mechanical engineer with the company has prepared the following cash flow estimates. Determine the expected rate of return per quarter and per year (nominal)
Quarter Cost, $ Savings, $
0 -450,000 –
1 -50,000 10,000
2 -40,000 20,000
3 -30,000 30,000
4 -20.000 40,000
5 -10.000 50,000
6 – 12 – 80,000
