Answer:
1. 3 years and 9 months
2. $16,439,325
3. 20.33 %
Explanation:
The Summary of the Cash Flows for this project will be as follows :
Year 0 - $7,125,000
Year 1 $1,875,000
Year 2 $1,875,000
Year 3 $1,875,000
Year 4 $1,875,000
Year 5 $1,875,000
Year 6 $1,875,000
Year 7 $1,875,000
Year 8 $1,875,000
Payback Period
$7,125,000 = Year 1 ($1,875,000) + Year 1 ($1,875,000) + Year 1 ($1,875,000) + $1,500,000 / $1,875,000
= 3 years and 9 months
Net Present Value (NPV)
Calculation using a financial calculator :
- $7,125,000 CFj
$1,875,000 CFj
$1,875,000 CFj
$1,875,000 CFj
$1,875,000 CFj
$1,875,000 CFj
$1,875,000 CFj
$1,875,000 CFj
$1,875,000 CFj
I/YR 12%
Shift NPV $16,439,325
Internal Rate of Return (IRR)
Calculation using a financial calculator :
- $7,125,000 CFj
$1,875,000 CFj
$1,875,000 CFj
$1,875,000 CFj
$1,875,000 CFj
$1,875,000 CFj
$1,875,000 CFj
$1,875,000 CFj
$1,875,000 CFj
Shift IRR 20.33 %
Answer:
The correct answer is b. It makes a company more susceptible to competitive inroads.
Explanation:
Market segmentation is essential to know how is the public that makes up the market in which we are. There are a number of advantages and disadvantages of market segmentation that you should keep in mind, before venturing into such a study for your company.
Errors when establishing the segment
The first and main disadvantage of including market segmentation techniques is the wrong selection of a segment.
Keep in mind that if the company chooses a wrong market fraction, too small or irrelevant for the company's business, then the business will find it difficult to market its product.
Commercial Saturation Issues
Another drawback derived from this strategy is to enter a market segment in which there is strong competition and saturation. When we are about to create a company or product we must take into account the development possibilities we have in that market.
The Millennial generation as they emphasize corporate social responsibility.
Answer:
b. induces buyers to consume less, and sellers to produce less.
Explanation:
Because of the increase of tax on each good, it will cause a deadweight loss. At higher tax rates we consumers tend to consume less, the decrease in demand will inevitably decrease the supply therefore sellers will produce less.
Answer:
$120
Explanation:
Given:
• Geometric growth rate of existing financial security:
$4 to $8 to $16 to $32 to $64 to $128
• Arithmetic growth rate of underlying assests:
$4 to $6 to $8 to $10 to $12 to $14
From the values, when the price of the underlying assests is $14, the price of the existing financial security is $128.
We are told to that when values of financial secrities increased from $4 to $128, that of underlying assests also increased from $4 to $14. If patterns hold for decreases as well as for increases. Therefore to get the value of financial securities decline if the value of underlying assests suddenly and unexpectedly fell by $6, we have:
Price of underlying assests when decreased by $6 =
$14-$6 = $8.
Therefore, price of existing financial security decline wil be:
$128-$8 = $120