Answer:
A. If the motor scooter is sold for $2.480, then the net present value (NPV) for the product will be zero.
Explanation:
As we believe that The break even point is the point where the organization has no income gained and no loss incurred While the present net value is the value that determines whether or not the projects will be approved after considering the discounted cost.
It means that if the original investment is less than the present value then the proposal is otherwise refused, the break even point is where the net present value is zero
Hence, the first option is correct
Answer:
1-a.
in order to determine the present value of option a we can look for the PVIFA (annuity factor) for 24% / 12 = 2% monthly rate and 25 payments.
PVIFA = 19.523
Present value of the 25 payments = $540 x 19.523 = $10,542.42
+
Present value of final payment = $10,000 / (1 + 24%)²⁵/¹² = $6,388.10
PV = $16,930.52
Present value of option b = $16,638
1-b.
- b. option b (lower present value)
B. Interact with customers after they have purchased the product.
For example, if you are having trouble with a product or it has a malfunction, you would call the customer service for the company/product for assistance.
