A company that manufactures high-strength epoxys is considering investing $100,000 in two new adhesives identified as X and Z. The investment in X is $20,000 and is expected to yield a rate of return of 40% per year. Your supervisor asked you to determine what rate of return would be required on the remaining $80,000 in order for the total return to be at least 25%. You responded that the return would have to be at least:
(a) 10.4%
(b) 16.8%
(c) 21.3%
(d) 24.1%
20,000(0.40) + 80,000(x) = 100,000(0.25)
x = 21.3%
Answer is (c) 21.3%
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