Answer:
Explanation:
a.)
Using Financial calculator, enter the following CFs to find NPV;
CF0 = -1,800,000
C01 =600,000
C02 =600,000
C03 =600,000
C04= 600,000
C05 = 600,000
Interest rate ( I ) = 8%
CPT NPV = $595,626.02
b.)
Profitability Index (PI)
<em>PI= NPV of cash inflows / Initial outlay</em>
Using Financial calculator, enter the following CFs;
Find the NPV of the expected future cash inflows;
CF0 = 0
C01 =600,000
C02 =600,000
C03 =600,000
C04= 600,000
C05 = 600,000
Interest rate ( I ) = 8%
NPV = $2,395,626.02
PI = $2,395,626.02/1,800,000 = 1.331
c.)
You can use a Financial calculator to find the IRR;
CF0 = -1,800,000
C01 =600,000
C02 =600,000
C03 =600,000
C04= 600,000
C05 = 600,000
CPT IRR = 19.86%
d.)
Based on the NPV rule, a company should accept a project if the NPV is greater than 0. This project's NPV of $595,626.02 meets this criteria , therefore, the project should be accepted.
Based on IRR rule, a company should accept a project if the IRR of the project is greater than the cost of capital; which is also the required return. The IRR of this project is 19.86% which is significantly higher than the cost of capital of 8% hence in agreement that the project should be accepted. The Profitability Index is also greater than 1 hence the project should be accepted.
Answer:
Standard Cycle market.
Explanation:
Standard Cycle Markets are markets where the imitation of the products that a competitor sells is very difficult and expensive. In case of bottled water, The scope of innovation is very low and thus the it is very difficult for any company to gain competitive advantage over its competitors in such markets. Therefore, Bottled Water market is considered as the most appropriate example of 'Standard Cycle Market'.
Answer:
$300
Explanation:
Given:
Investment opportunity = $250
Total possible outcomes = 2
Payoff yield of first outcome = $100
probability of first outcome = 0.25
Computation:
Probability of all outcomes = 1
Probability of second outcome = 1 - probability of first outcome
= 1 - 0.25
= 0.75
Payoff yield of second outcome = (Payoff yield of first outcome x Probability of second outcome) / Probability of first outcome
= ($100 x 0.75) / 0.25
= $300
Production of Goods depends upon the technology used in the factory or in the machines of production. In order to improve the production of goods, the machines should be of advances technology.
For example, in order to print pages speedily, you need to buy an advances technology printer.
Hence one way that technology can improve the production of goods is using the advances and innovative technology which shall increase the efficiency and improve the production.
Competitors and supply chain is an element of economic forces.
<h3>What are economic forces?</h3>
Economic forces are those factors that assist a firm in terms of its competitiveness in the environment it operates.
Here, economic forces have a direct impact on business and are essential factors that can help an organization in accomplishing its targets.
Learn more about economic forces here: brainly.com/question/13721949
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