If I had written your question in English, I could have helped you
Answer:
1. Calculate the NPV for each option available for the project. (Do not round intermediate calculations. Enter your answers in dollars, not millions of dollars, e.g. 1,234,567.)
- go to market now = $744,000
- focus group = $852,000
- consulting firm = $916,000
2. Which action should the firm undertake?
The NPV is higher than the rst of the options.
Explanation:
expected payoffs:
- option 1 (go to market now) = (40% x $1.86 million) + 0 = $744,000
- option 2 (focus group) = (55% x $1.86 million) + 0 = $1,023,000
- option 3 (consulting firm) = (70% x $1.86 million) + 0 = $1,302,000
expected NPVs:
- option 1 (go to market now) = $744,000
- option 2 (focus group) = $1,023,000 - $171,000 = $852,000
- option 3 (consulting firm) = $1,302,000 - $386,000 = $916,000
go to market now
<h3>Advertising expenditures to introduce a new product line is not a capital expenditure.
</h3>
Explanation:
- Buying a new machinery and associated sales tax is a capital investment.
- Installation of elevators to replace escalators is a capital investment.
- Purchasing a patent is a capital investment.
- Advertising costs will in most cases fall under sales, general, and administrative (SG&A) expenses on a company's income statement.
So, Advertising expenditures to introduce a new product line is not a capital expenditure.
Answer:
Explanation:
The purpose of allocating the output of the shoes is to diminish the total cost of production. The process is achieved by assigning a pair of shoes that requires production at the factory with a marginal lower cost of the two plants. Afterward, the firms will have to equate the marginal cost of production across the two firms.
For firm 1:
The cost of production 
Differentiating with respect to 
to determine the marginal cost;
For firm 1, the Marginal cost 
For firm 2; the marginal cost 
Equating both from above:
Recall that:
Thus, we can replace the value of into the above equation to determine the value of 
in terms of 
by applying a quadratic formula.
Assuming we knew the values of 
we can estimate the numerical value of , then replace it into the equation 
to find the numerical value for .
What is inflation?
Monetary value of final goods and services produced within a country for a specific time period.
