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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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Adams Industries holds 42,000 shares of FedEx common stock, which is not a large enough ownership interest to allow Adams to exe
olga2289 [7]

Answer:

investment in FedEx = 4410000

Unrealized holding gain = 420000

Explanation:

given data

FedEx common stock = 42,000 shares

market value = $95

market value = $105

to find out

what amount will it be reported in the 2019 balance sheet

solution

we know that It is coming under available for sale security since the shares hold is less than majority of outstanding shares

and here

investment in FedEx =42,000  × 105

investment in FedEx = 4410000

and

Unrealized holding gain is = ( 105 - 95 ) × 42000

Unrealized holding gain = 420000

5 0
3 years ago
Which type of graphic organizer would best organize your notes on how to start a small business?
Dimas [21]
My best guess is a timeline!
4 0
3 years ago
What does it mean when an economist says that a consumer has demand for a good or service?
FrozenT [24]
Demand means the consumers want the product or service. If there is a demand, companies must supply. "supply and demand"
7 0
3 years ago
GFR Group is the parent company of many related businesses under its banner. Each share of the parent company is quoted at $220.
Ierofanga [76]

Answer:

GFR Group created has successfully created a synergy of $20

Explanation:

The fact that the share price of the company is $20 more than the sum of each strategic business units share prices put together means that the parent has created a synergy of $20.

Synergy means when combined firms far outweigh the results of each strategic units added together

3 0
3 years ago
Timmy has almost $2.00 in allowance money that he wants to spend on candy. he has two favorite candies, one selling at $0.15 a p
jolli1 [7]
Let's call
 x = Amount of candy sold at $ 0.15.
 y = Amount of candy sold at $ 0.08.
 We must make the following system of equations:
 x + y = 17
 0.15x + 0.08y = 1.92
 Solving the system of equations:
 0.15x + 0.08 (17-x) = 1.92
 0.15x-0.08x + 1.36 = 1.92
 0.15x-0.08x = 1.92-1.36
 0.07x = 0.56
 x = 0.56 / 0.07 = 8
 On the other hand,
 x + y = 17
 8 + y = 17
 y = 17-8 = 9
 Finally, Timmy bought 8 pieces of candy for $ 0.15.
3 0
3 years ago
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