Petrus Company has a unique opportunity to invest in a two-year project in Australia. The project is expected to generate 1,000,
000 Australian dollars (A$) in the first year and 2,000,000 Australian dollars in the second. Petrus would have to invest $1,500,000 in the project. Petrus has determined that the cost of capital for similar projects is 14%. What is the net present value of this project if the spot rate of the Australian dollar for the two years is forecasted to be $.55 and $.60, respectively
The financing that is most likely being used for this construction are <u>taxation </u>or <u>government securities issuance</u>.
<h3>Sources of government financing </h3>
Government can raise funds from taxing the people they govern.
They can also raise funds by issuing securities such as notes to the public.
The agency behind the construction of the venue is a governmental agency which means that it is most likely raising funds from one of the two methods described.
Boycott refers to the avoidance of goods and products from an entity in an act of protest against an action by the entity. The entity could be a state, government, company, or any other body. The aim is usually to prevent economic benefits from flowing to the entity thereby forcing it to reverse the action being protested against.
Expropriation refers to the takeover of a property by a government usually for public use. Quota refers to limiting the quantity of goods to be imported from a foreign country to a given quantity. Tariff refers to a charge on imports from other countries. Exchange control refers to measures aimed at stabilizing the value of a nation's currency.
We need to note that mention was made that the research was "<em>Carefully controlled." </em>Been carefully controlled shows that the research has an objective.
Furthermore, measuring the reactions of consumers at different salt levels makes the research factual and thus a decision could be made from the findings.
Explanation: In simple words, best cost strategy refers to the strategy under which the organisation focuses on increasing the customer satisfaction by providing the goods at a lower price. Under this strategy the organisation increases the value for money.
In the given case, The motor company is planning to provide customized product at a lower price than the competitors.
Thus, from the above we can conclude that the company is using the best cost strategy.