Rule I is correct.
<u>Explanation:</u>
Year Cash flow Pv at 8% Discounted cash flow
0 100000 1 100000
1 26000 0.9259 24074.074
2 26000 0.8573 22290.809
3 26000 0.7938 20639.638
4 26000 0.7350 19110.776
5 26000 0.6806 17695.163
From the above calculation, the net present value is $203810.46
Option 1 Option 2
NPV 203810.5 200000
Payback 5 years 0 years
IRR No IRR No IRR
NPV (Net present value) option say that former would be selected
So, answer is Rule I only.
Answer:
D. Threat of new entrants, threat of substitutes, bargaining power of buyers, bargaining power of suppliers, current rivalry
Explanation:
Porter's 5 Factor Model is also known as Porter's five forces. Michael E. Porter was a Professor from Harvard Business School. The model is usually applied in an industry to identify the forces that compete to shape the industry. Put differently, these five forces help to analyse an industry's Strength, Weaknesses, Threats and Opportunities (SWOT) Analyses.
As detailed in the answer, the five categories in Porter's model are; Competitors in the industry, Potential of new entrants in the industry, Power of suppliers, Power of customers and the threat of substitute products.
