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zhuklara [117]
4 years ago
5

Salon Finish is test marketing its new smoothing shampoo by assessing consumer satisfaction in laboratory stores where hair is w

ashed and blown dry. Salon Pro is using controlled test marketing in this scenario. A. True B. False
Business
1 answer:
kramer4 years ago
4 0

"Salon Finish is test marketing its new smoothing shampoo by assessing consumer satisfaction in laboratory stores where hair is washed and blown dry. Salon Pro is using controlled test marketing in this scenario" is FALSE.

<u>Explanation:</u>

There are three forms of test markets:

  • standard test markets,
  • test markets controlled and
  • test markets simulated.

Consumer packaged goods advertisers are the prime consumers of test markets.The company chooses several retailers in different geographic locations under this test and asks them to maintain their new product in their outlets for a fee. The company controls the shelf location, displays, promotions and prices point of purchase, thus understood as "controlled test marketing". Thus here Salon Finish has not opted such strategy.

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What is the present value of the future cash flows, if you also could earn $110,000 per year rent on the property? The rent is p
dem82 [27]

Answer:

a. The present value of the sales price is $1.657 million.

b. No. This is because an investment in the property will result in a negative net present value (NPV) of $0.443 million.

c-1. The present value of the future cash flows is $2.122 million.

c-2. Yes. Yes. This is because an investment in the property will result in a positive net present value (NPV) of $0.022 million.

Explanation:

Note: This question is not complete. The complete question is therefore presented before answering the question as follows:

You can buy property today for $2.1 million and sell it in 6 years for $3.1 million. (You earn no rental income on the property.)

a. If the interest rate is 11%, what is the present value of the sales price? (Do not round intermediate calculations. Enter your answer in millions rounded to 3 decimal places.)

b. Is the property investment attractive to you?

c-1. What is the present value of the future cash flows, if you also could earn $110,000 per year rent on the property? The rent is paid at the end of each year. (Do not round intermediate calculations. Enter your answer in millions rounded to 3 decimal places.)

c-2. Is the property investment attractive to you now?

The explanation to the answers is now provided as follows:

a. If the interest rate is 11%, what is the present value of the sales price? (Do not round intermediate calculations. Enter your answer in millions rounded to 3 decimal places.)

The present value of the sales price can be calculated using the simple present value formula as follows:

PV = FV / (1 + r)^n ……………………….. (1)

Where;

PV = Present value of the sales price = ?

FV = Future value or the sales price in 6 years = $3.1 million

r = interest rate = 11%, or 0.11

n = number of years = 6

Substitute the values into equation (1), we have:

PV = $3.1 / (1 + 0.11)^6

PV = $3.1 / 1.11^6

PV = $3.1 / 1.870414552161

PV = $1.65738659187525 million

Rounding to 3 decimal places, we have:

PV = $1.657 million

Therefore, the present value of the sales price is $1.657 million.

b. Is the property investment attractive to you?

No. This is because an investment in the property will result in a negative net present value (NPV) of $0.443 million.

The negative net present value (NPV) of $0.443 million is determined as follows:

NPV = Present value of the sales price - Acquisition cost = $1.657 million - $2.1 million = -$0.443 million

c-1. What is the present value of the future cash flows, if you also could earn $110,000 per year rent on the property? The rent is paid at the end of each year. (Do not round intermediate calculations. Enter your answer in millions rounded to 3 decimal places.)

The present value of the future cash flows can be calculated using the following steps:

<u>Step 1: Calculation of the present value of the $110,000 per year rent</u>

Since the rent is paid at end of each year, this can be calculated using the formula for calculating the present value of an ordinary annuity as follows:

PVR = P * ((1 - (1 / (1 + r))^n) / r) …………………………………. (2)

Where;

PVR = Present value of yearly rent = ?

P = Annual rent =$110,000

r = interest rate = 11%, or 0.11

n = number of years = 6

Substitute the values into equation (2) to have:

PVR = $110,000 * ((1 - (1 / (1 + 0.11))^6) / 0.11)

PVR = $110,000 * 4.23053785373826

PVR = $465,359.163911209

Converting to million and rounded to 3 decimal places, we have:

PVR = $0.465 million

<u>Step 2: Calculation of the present value of the future cash flows</u>

Present value of future cash flows = Present value sales price + Present value of annual rent ……. (3)

Where;

Present value sales price = $1.657 million, as already calculate in part a above

Present value of annual rent = PVR = $0.465 million

Substituting the values into equation (3), we have:

Present value of future cash flows = $1.657 million + $0.465 million = $2.122 million

Therefore, the present value of the future cash flows is $2.122 million.

c-2. Is the property investment attractive to you now?

Yes. This is because an investment in the property will result in a positive net present value (NPV) of $0.022 million.

The positive net present value (NPV) of $0.022 million is determined as follows:

NPV = Present value of tof the future cash flows - Acquisition cost = $2.122 million - $2.1 million = 0.0219999999999998 million

Converting to million and rounded to 3 decimal places, we have:

NPV = $0.022 million

6 0
3 years ago
By offering more generous unemployment insurance programs, European countries can expect Group of answer choices longer periods
natulia [17]

Answer:

Longer periods of unemployment for their workers.

Explanation:

Unemployment is when people who are willing and able work do not have jobs

Types of unemployment

structural unemployment is an unemployment that occurs as a result of changes in the economy. These changes can be as a result of changes in technology, polices or competition. Structural unemployment tends to be permanent.  

Frictional unemployment:  the period of time a person is unemployed from the period he leaves his current job and the time he gets another job. Eg. when a real estate agent who leaves a job in Texas and searches for a similar, higher-paying job in California.

Voluntary unemployment: e.g. worker at a fast-food restaurant who quits work and attends college.

Cyclical unemployment: it occurs as a result of fluctuations in the economy. Unemployment would be high in a downturn and low in a boom  

If a government gives generous unemployment insurance programs, there would be less incentive to find jobs because one of the main reasons why people would want to work is to have money. If the government provides generous pay to the unemployed, there would be less motivation to work and unemployment increases

6 0
3 years ago
Upper management is considering using a biodegradable packaging which costs $5 more per unit but it produces less waste in the l
bonufazy [111]

Answer:

Check the explanation

Explanation:

Please the answer to this question is in the attached file

You can confirm the answer by planning income statement with the calculated amount of unit so that whenever you’re through with the calculation, you must get an income figure of 240000. As the amount of units are in decimal so +/- of small number could be possible like you will get the operating income of 240005 if you put 13077 units .

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3 years ago
he HR department at Bailey Services is considering offering telecommuting as an option to some experienced employees. At a meeti
alexira [117]

Answer:

<u>groupshift.</u>

Explanation:

This scenario describes the operation of groupshift.

This can be defined as a phenomenon that occurs to explain that when people are part of a group, their risk decisions are made differently than they would be made if they were alone. Shared group risk decreases individual risk, so decisions that are made in a group are often more risky.

One of the reasons for groupshift is that the emotional bonds created in the group help to reduce anxiety and tension within the group and therefore the risk seems less.

5 0
4 years ago
Read 2 more answers
A student wants to buy a smartphone so she can share pictures with her friends. An insurance claims adjuster wants to buy a smar
gayaneshka [121]

Answer:

Option A (Both the adjuster and the student we potential customers because in their own way, they both benefit from the product).

Explanation:

Both the adjuster and the student were potential customers as they were both buying the smartphone for either personal or official use. The adjuster sees the smartphone as a product or tool that could be used to make work efficient. The student sees the product as a luxury. Either way, they are buying the smartphone and as such, they are very important to the producers of the smartphone because the product is useful to both of them.

5 0
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