solution

A manufacturer of I-phones made an investment of $500,000 in the current year on research and development (R&D). They also spent $200,000 on improving their processes. Based on the improved product design, the company expects sales to increase from 200,000 units last year to 220,000 units in the current year. Further, due to added functionality, the company plans to increase the product unit price from $300 to $350. At the end of the year, they found that rework and scrap costs had reduced from $70,000 in the previous year to $30,000 in the current year. What is the percentage increase in net profit, ignoring other costs? Was this a good investment?