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mojhsa [17]
3 years ago
13

Two firms examined the same capital budgeting project which had an IRR of 16%. One firm accepted the project but the other rejec

ted it. One of the firms must have made an incorrect decision.
Discuss the validity of this statement.
Business
1 answer:
Mrrafil [7]3 years ago
7 0

Answer:

the statement is not valid. A company can reject the 16% IRR project if it is less than its discount rate. the discount rate is the minimum acceptable rate at which a project can be accepted. so, if 16% is less than than the discount rate, the project would be rejected.

on the other hand, if the discount rate is less than 16%, the project should be accepted because the return of the project would be greater than the discount rate.

Explanation:

Internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested.

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Procter & Gamble recently introduced Pampers Rash Guard. Rash Guard does not represent a new product per se; rather, the dia
elena-14-01-66 [18.8K]

Answer:

<u>A continuous innovation.</u>

Explanation:

In this question, we can consider that the company Procter and Gambler used when launching the Pampers Rash Guard, a strategy of continuous innovation, as this is not a new product in itself, but an alternative to ordinary pampers diapers.

Continuous innovation can be defined as a strategy used by companies, mainly a large company like P&G, so that the company has a greater positioning in the market and with this the company becomes the market leader, as it already offers a product recognized as diapers Pampers and yet creates an innovation for diapers, so that it can reach a greater number of consumers and attest to its positioning of an innovative and updated company, which always seeks improvements for products that are already recognized as products of value and quality for the consumer.

3 0
3 years ago
A simple economy produces two goods, Corn BreadCorn Bread and SoftwareSoftware.
Verdich [7]

Answer:

Consider the calculations below

Explanation:

(1) Nominal GDP, year 2 ($) = Sum of (Year 2 price x Year 2 quantity)

= 125 x 1.5 + 825 x 90

= 187.5 + 74,250

= 74,437.50

(2) Real GDP, year 2 ($) = Sum of (Year 1 price x Year 2 quantity)

= 1 x 125 + 45 x 825

= 125 + 37,125

= 37,250.00

6 0
3 years ago
Countess Corp. is expected to pay an annual dividend of $5.05 on its common stock in one year. The current stock price is $77.75
Alex_Xolod [135]

Answer:

Cost of equity = 10.10%

Explanation:

<em>Cost of equity can be ascertained using the dividend valuation model. The model states that the price of a stock is the present value of future dividends discounted at the required rate of return.  </em>

Ke=( Do( 1+g)/P ) + g  

g- growth rate in dividend, P- price of the stock, Ke- required return, D- dividend payable in now

DATA

D0- (1+g) = 5.05

g- 3.60%

P- 77.75

Note that the D0× (1+g) simply implies the dividend expected in year one, that is one year from now. And this has been given as 5.05 in the question, hence there is no need to apply the growth rate again.

Cost of equity = (5.05/77.75   + 0.036)×  100= 10.095%

Cost of equity = 10.10%

5 0
3 years ago
In the market for reserves, if the federal funds rate is between the discount rate and the interest rate paid on excess reserves
almond37 [142]

Answer:

Increases; Rise

Explanation:

In the market for reserves, if the federal funds rate is between the discount rate and the interest rate paid on excess reserves, an increase in the reserve requirement increases the demand of reserves and causes the federal funds interest rate to rise, everything else held constant.

4 0
3 years ago
What is brand repositioning?
timofeeve [1]
Brand repositioning is when a company changes their status in the marketplace. Like changes to the marketing mix including product, price, location, and promotion. Repositioning happens to fulfill consumer wants and needs

Hope this helps!
3 0
3 years ago
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