Without new products, Erik can market his current products only to his current market the same products to similar customers
<h3><u>
Explanation:</u></h3>
New product development involves a lot of research work. This plays a vital role in making the newly developed product to be more successful. The research team must first identify the areas that can be improved with the requirements and feedback from their loyal customers.
But in the given example, Erick’s company is already successful with the developed product for more than five years. Hence, it is recommended for marketing the current products to the current customers and market the same products to similar customers.
Answer:
1. Both shirts and handbags
2. Paul
3. Francisco
4. Specialized by producing shirts only
Explanation: I just took it hope this helps, you!
Answer: 8%
Explanation:
The expected return is a weighted average of the returns given the probability of certain states of the economy:
= (Prob. of boom * return if boom) + (Prob. of normal * return if normal) + (Prob. of weak * return if weak)
= (20% * 35%) + (50% * 14%) + (30% * -20%)
= 0.07 + 0.07 - 0.06
= 8%
Answer:
Option C is correct.
<u>The required rate of return for Mercury Inc., assuming that investors expect a 5% rate of inflation in the future is 18%.</u>
Explanation:
Real risk free rate = 3%
Inflation Premium = 5%
Nominal risk free rate Rf = Real risk free rate + Inflation Premium = 3% + 5% = 8%
Market risk premium (Rm –Rf) = 5%
Beta = 2
As per CAPM, required rate of return = Rf + beta * (Rm – Rf) = 8% + 2 * 5% = 18%
