A property title search firm is contemplating using online software to increase

Question

A property title search firm is contemplating using online software to increase its search productivity. Currently an average of 45 minutes is needed to do a title search. The researcher cost is $1.8 per minute. Clients are charged a fee of $600. Company A’s software would reduce the average search time by 8 minutes, at a cost of $3.6 per search. Company B’s software would reduce the average search time by 9 minutes at a cost of $5.8 per search.

Calculate the productivity in terms of revenue per dollar of input. (Round your intermediate calculations and final answers to 2 decimal places. Omit the "$" sign in your response.)

A property title search firm is contemplating using online software to increase its search productivity. Currently an average of 45 minutes is needed to do a title search. The researcher cost is $1.8 per minute. Clients are charged a fee of $600. Company A’s software would reduce the average search time by 8 minutes, at a cost of $3.6 per search. Company B’s software would reduce the average search time by 9 minutes at a cost of $5.8 per search.

Explanation / Answer

Approach   Average Time          Cost     Productivity per Dollar Input   Current 45 45 × $1.8 = $81.00 $600/$81.00 = $7.41   Company A 37 37 × $1.8 + $3.6 = $70.20 $600/$70.20 = $8.55   Company B 36 36 × $1.8 + $5.8 = $70.60 $600/$70.60 = $8.50

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