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TEMPES CORPORATION (A)
Tempes Corporation is deciding between two designs for its Water Moccasin deep-sea diving monitor. Design A uses acrylic polymer and cadmium coating, which is cheaper but generates hazardous waste. Design B uses a more expensive, recyclable engineering thermoplastic that reduces parts and leaks but requires higher initial capital for recycling equipment. The company must analyze these options using net present value (NPV) and internal rate of return (IRR) over an eight-year product lifespan, with projected first-year sales of 14,000 units and a 10% annual growth rate.
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Document type: Case study
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