Answer:
$573,941.22
Explanation:
Use WACC formula to find the cost of capital for discounting the given cashflows;
WACC = wE*rE + wD*rd (1-tax)
whereby;
wE = weight of equity
rE = cost of equity
wD = weight of debt
rd (1-tax) = aftertax cost of debt
WACC = (0.58*0.153) + (0.42 *0.054)
= 0.08874 + 0.02268
= 0.1114 or 11.14%
Find the present value of the growing perpetual cashflows which will be equivalent to the maximum initial outlay of the project needed to avoid a negative NPV;
PV = CF/ (WACC - g)
Cashflow; CF = $49,600
WACC = 11.14%
growth rate ; g = 2.5%
PV = 49,600/ (0.1114 - 0.025)
PV = 573,941.22
Therefore, maximum amount the firm can initially invest in this project to avoid a negative net present value is $573,941.22
It is log-linear which is the best fit to the data?
In order for "limit pricing" to be effective, the firm practising such a strategy must be able to charge a price that is lower than the potential entrant's ATC but greater than the firm's own ATC.
Explanation:
A pricing strategy is a level where products are sold by a supplier at an expense that is cheap enough to make the market unprofitable for others. Monopolies use it in order to discourage market entry and in many cases it is illegal.
It is not able to sustain a monopolistic-ally profitable firm where P = MC and growth, with a long-run balance, generates an efficiency that approaches the minimum possible in an ATC business. Profit so long as potential customers can not enter the market.
The answer is<u> "a. analysis, planning, implementation, organization, and control".</u>
The marketing process comprises of five key steps. The initial step is comprehend the commercial center and client needs and wants.In the last advance of the five-advance process, the organization receives the benefits of solid client connections by catching an incentive from customers. The marketing process, in which four of them concentrated on making an incentive for clients. One procedure for making an incentive for clients is customer-engagement marketing, which encourages immediate and ceaseless client association in forming brand discussions, brand encounters, and brand network.
