Answer:
The NPV of going directly to market and the NPV of test marketing before going to market is $22.5 million and $24.97 million respectively
Explanation:
The computation of the NPV of going directly to market is shown below:
= Present value of the payoff i.e market × success percentage + Present value of the payoff × failure percentage
= $33.5 million × 50% + $11.5 million × 50%
= $16.75 million + $5.75 billion
= $22.5 million
And, The computation of the NPV of going directly to market is shown below:
= (Present value of the payoff i.e market × success percentage + Present value of the payoff × failure percentage) ÷ ( 1 + discount rate) - spending amount
= ($33.5 million × 80% + $11.5 million × 20%) ÷ ( 1 + 0.11) - $1.25 million
= ($26.80 million + $2.30 million) ÷ (1.11) - $1.25 million
= ($29.10 million) ÷ (1.11) - $1.25 million
= $24.97 million
Answer:
P = Average Total Cost
Explanation:
Because the market is monopolistically competitive market, one can tell that it is in long run equilibirum by the fact that P = ATC at the optimal quantity. Furthermore, the quantity he firm produces in long run equilibrium is less than efficient scale.
Explanation:
All good!! What about you.. friend?
Answer:
A puttable bond.
Explanation:
According to the corporate finance institute, "A puttable bond (put bond or retractable bond) is a type of bond that provides the holder of a bond (investor) the right, but not the obligation, to force the issuer to redeem the bond before its maturity date. Puttable bonds are directly opposite to callable bonds."
A puttable bond (put bond, putable or retractable bond) has an embedded put option, giving the bondholder the right, but not the obligation, to demand early repayment of the principal, with the put option exercisable on one or more specified dates.
It is a kind of protection offered to investors so that they could "turn in their bonds to the issuer and get the value equal to the par value."
Answer:
Options a and b are correct.
Explanation:
Capital investments are relatively inexpensive.
Capital investments have multiyear life spans, so mistakes linger for a long time.
