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Troyanec [42]
3 years ago
12

Consider the following statement about real options: Decision tree analysis is more commonly used in valuing securities than rea

l assets. True or False: The preceding statement is correct. O False O True which type of real option allows the output and/or inputs in the production process to be altered, depending on how market conditions change during a project's life? O Flexibility option O Abandonment option O Timing option O Expansion option Consider the following example: Clemens Inc. is considering a$100 million investment in a new line of soft drinks. However, $100 million is a huge investment for Clemens; if things turn bad, it could wipe out the company. A few senior managers have suggested a smaller investment of $20 million to see if the market is as strong as they hope it is. If demand is strong and the apportunity is still available, Clemens will increase its investment ata later date. This example describes a real option to
Business
1 answer:
maksim [4K]3 years ago
7 0

Answer:

Flexibility option

Explanation:

False: It can be used equally for both.

Firms often have an option to vary inputs to the production or change the output from production. Such options are known as flexible production options.\  real option to expand.

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Hampton Corporation has a beta of 1.3 and a marginal tax rate of 34%. The expected return on the market is 11% and the risk-free
Maurinko [17]

Answer: 12.5%

Explanation:

Given the following :

Beta (B) = 1.3

Marginal tax rate = 34%

Risk free interest rate = 6%

Market rate of return = 11%

The cost of equity is calculated using the relation:

Risk free rate of return + Beta(market rate of return - risk free rate of return)

Cost of equity = 6% + 1.3(11% - 6%)

Cost of equity = 6% + 1.3(5%)

Cost of equity = 6% + 6.5%

Cost of equity = 12.5%

Therefore, the firm's cost of internal equity is 12.5%

6 0
3 years ago
Having a good credit score is important because
zvonat [6]
It shows you're trustworthy and banks will be more willing to loan you money
5 0
3 years ago
Read 2 more answers
Johanna has been asked by the department manager to prepare a SWOT analysis on two of the company's products. In which step of t
Stella [2.4K]

Answer:

The options for this question are the following:

A. current reality assessment

B. establish the mission

C. prepare values statement

D. maintain strategic control

The correct answer is A. current reality assessment .

Explanation:

The current evaluation has been designed to evaluate competencies. In the new trends, two support centers can be found: one, focused on the critical review of education sciences in particular and social sciences in general and the other, more pragmatic, derived from the new challenges introduced by the progress dizzying of science and technology.

The traditional evaluation procedure responds to content-based education. It is based on forms of institutionalized obedience and tends to lead the educational process to the school routine and the use of coercive measures, thus impeding the search for critical and creative thinking.

3 0
3 years ago
Net exports are Multiple Choice exports plus imports. imports less exports. exports less imports. that portion of consumption an
sergij07 [2.7K]

Answer:

The correct answer is letter "C": exports less imports.

Explanation:

Net exports are the difference between exports and imports from a country. It is computed by subtracting the total export value of the country, with the total value of the imports. Net exports from a country take on a negative value or <em>trade deficit </em>if it imports more merchandise than it produces. If a nation imports less merchandise than it exports, a positive value or <em>trade surplus </em>results.

8 0
3 years ago
evaluate whether locating closer to raw materials is the most important factor when locating a business. if not what other facto
lutik1710 [3]

Answer:

The nature of the major raw material requires to produce the product of the business determines the level of importance attached to locating a business closer to raw materials.

Explanation:

The level of importance attached to locating a business closer to raw materials depends on the nature of the major raw material requires to produce the product of the business.

When the major raw material requires to produce the product of the business is a heavy raw material that cannot be easily transported, locating the business closer to the raw material will be the most important factor.

However, when the major raw material requires to produce the product of the business can be easily be transported, locating the business closer to raw materials will NOT be the most important factor. In this case, some of the other important factors to consider will include proximity to markets; availability of labour; water supply; availability of power, fuel or gas; waste products disposal facility and among others.

6 0
3 years ago
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