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Annette [7]
3 years ago
7

Industrialization Enterprise is considering a three-year project that will require an initial investment of $44,000. If market d

emand is strong, Industrialization Enterprise thinks that the project will generate cash flows of $28,500 per year. However, if market demand is weak, the company believes that the project will generate cash flows of only $1,500 per year. The company thinks that there is a 50% chance that demand will be strong and a 50% chance that demand will be weak. If the company uses a project cost of capital of 12%, what will be the expected net present value (NPV) of this project?
a. $7,172
b. $6,813
c. $8,606
d. $6,096
Business
1 answer:
boyakko [2]3 years ago
6 0
It’s C sorry if i’m wrong then
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blondinia [14]
The answer is 465
12 x 20 is 240
15 x 15 is 225
225 +240 = 465
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2 years ago
The demand for apples in the U.S. is Qus = 800 - 20P, and Foreign Demand for apples is Qf = 1200 - 40P, where quantity demanded
MA_775_DIABLO [31]

Answer:

Option (2) is correct.

$20; 800

400;400

Explanation:

Given that,

Demand for apples in the U.S. : Qus = 800 - 20P

Foreign Demand for apples: Qf = 1200 - 40P

World Demand for apples, Qwd

= Demand for apples in the U.S. + Foreign Demand for apples

= Qus + Qf

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Equilibrium price for apples is at a point where the world supply is equal to the world demand for apples:

Qwd = Qws

2,000 - 60P = 200 + 30P

1,800 = 90P

P = 20 ⇒ world equilibrium price for apples

Therefore,

world supply of apples is Qs = 200 + 30P

                                                = 200 + 30(20)

                                                = 200 + 600

                                                = 800

At equilibrium Pw = $20

Demand for apples in the U.S. : Qus = 800 - 20P

                                                            = 800 - 20(20)

                                                            = 800 - 400

                                                            = 400

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Answer:

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The rest are Secondary activity in Porter's value chain model.

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