HBR 20-Minute Manager Boxed Set (10 Books) (HBR 20-Minute Manager Series)

65

Calculating Return

on Investment

I

magine that Amalgamated Hat Rack is consider-

ing two investment options: buying a new piece

of machinery and creating a new product line.

The new machine is a plastic extruder with a price

tag of $100,000. Amalgamated hopes it will save time

and money over the long term, and that it will be safer

than the current equipment. The second possibility,

launching a line of coatracks, will require a $250,000

investment in design, production equipment, and

marketing.

How will Amalgamated decide whether these op-

tions make economic sense? And if it can afford only

one of them, how will it decide which to choose?

H6416.indb ...