This topic contains a solution. Click here to go to the answer

Author Question: You manage a new product development team for an electronics manufacturer, and your firm's policy is ... (Read 69 times)

sabina

  • Hero Member
  • *****
  • Posts: 563
You manage a new product development team for an electronics manufacturer, and your firm's policy is that all new projects must pay for themselves in the first five years.
 
  Your team has projected that the first year of the project requires an initial investment of 2 million with no revenue, the second year loss is 500,000, the net revenue for year 3 is zero, and you earn 1.8 million in both year 4 and year 5. If the opportunity cost of capital for your firm is 8, should you go ahead with this project? A) No, the expected NPV is negative
  B) Yes, the expected NPV is roughly 290,000
  C) Yes, the expected NPV is 1.1 million
  D) We do not have enough information to answer this question.

Question 2

Suppose that a tax of 2 per unit of output is imposed on red rubber ball producers. What level of output maximizes profit?
 
  A) -1
  B) 3
  C) 4.5
  D) 5
  E) B, C, and D are correct.



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

miss_1456@hotmail.com

  • Sr. Member
  • ****
  • Posts: 289
Answer to Question 1

B

Answer to Question 2

D




sabina

  • Member
  • Posts: 563
Reply 2 on: Jul 1, 2018
Gracias!


marict

  • Member
  • Posts: 304
Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

 

Did you know?

Approximately one in four people diagnosed with diabetes will develop foot problems. Of these, about one-third will require lower extremity amputation.

Did you know?

Studies show that systolic blood pressure can be significantly lowered by taking statins. In fact, the higher the patient's baseline blood pressure, the greater the effect of statins on his or her blood pressure.

Did you know?

Chronic necrotizing aspergillosis has a slowly progressive process that, unlike invasive aspergillosis, does not spread to other organ systems or the blood vessels. It most often affects middle-aged and elderly individuals, spreading to surrounding tissue in the lungs. The disease often does not respond to conventionally successful treatments, and requires individualized therapies in order to keep it from becoming life-threatening.

Did you know?

About 100 new prescription or over-the-counter drugs come into the U.S. market every year.

Did you know?

A seasonal flu vaccine is the best way to reduce the chances you will get seasonal influenza and spread it to others.

For a complete list of videos, visit our video library