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Naily [24]
3 years ago
13

Expando, Inc., is considering the possibility of building an additional factory that would produce a new addition to their produ

ct line. The company is currently considering two options. The first is a small facility that it could build at a cost of $7 million. If demand for new products is low, the company expects to receive $9 million in discounted revenues (present value of future revenues) with the small facility. On the other hand, if demand is high, it expects $14 million in discounted revenues using the small facility. The second option is to build a large factory at a cost of $8 million. Were demand to be low, the company would expect $9 million in discounted revenues with the large plant. If demand is high, the company estimates that the discounted revenues would be $13 million. In either case, the probability of demand being high is .30, and the probability of it being low is .70. Not constructing a new factory would result in no additional revenue being generated because the current factories cannot produce these new products.
a.
Calculate the NPV for the following: (Leave no cells blank - be certain to enter "0" wherever required. Enter your answers in millions rounded to 1 decimal place.)

Plans NPV
Small facility $ million
Do nothing million
Large facility million
b. The best decision to help Expando is
to build the large facility.
to build the small facility.
to do nothing.
Business
2 answers:
Yuliya22 [10]3 years ago
4 0

Answer:

D

Explanation:

aleksandrvk [35]3 years ago
4 0

Answer:

B

Explanation:

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Gwar [14]

there are 5 ways to participate in your community

1 volunteer your time

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6 organise your own event

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7 0
2 years ago
Arturo Company pays $4,000,000 cash and issues 20,000 shares of its $2 par value common stock (fair value of $50 per share) for
serious [3.7K]

Answer:

As follows:

Explanation:

For acquisition of Westmont Company.

Inventory dr. 600,000

Land dr. 990,000

Buildings dr. 2,000,000

Customer Relationships dr. 800,000

Goodwill dr. 690,000

Accounts Payable cr. 80,000

Common Stock cr. 40,000

Additional paid-up capital cr. 960,000

Cash cr. 4,000,000

For legal fees

Services Expense dr 42,000

Cash cr 42,000

For stock issuance

Additional Paid-In Capital dr 25,000

Cash cr 25,000

7 0
3 years ago
Pes
lakkis [162]

Answer:

ushsj

Explanation:

bshshshhdshshshhshdbshjdjdkdjddjjdndndndnfnfkdk

8 0
3 years ago
Sparty Corporation has provided the following information for its most recent year of operation:
Wewaii [24]

Answer:

E. $40,600

Explanation:

Calculation for the amount of net income reported on Sparty's income statement

Revenue $97,000

Less: Operating Expenses $39,000

Profit Before Tax $58,000

(97,000-39,000)

Less Taxes $17,400

Net Income $40,600

($58,000-$17,400)

Therefore the amount of net income reported on Sparty's income statement will be $40,600

7 0
3 years ago
Ok so i have a ton of questions i need answered for this test im taking. its on economics. anyone think they can help? thank you
satela [25.4K]
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</span>
5 0
3 years ago
Read 2 more answers
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