Entrepreneurial process in competitive market economy

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Reference no: EM131925108

1. A project with an initial investment for the project is $2.5 million has perpetual cash inflows of $0.225 million per annum beginning in one year.

-The opportunity cost of capital for the project is 12%.

- The project supports borrowing of $1 million.

- The marginal tax rate is 35%.

- The borrowing cost for $1 million of debt is 6% per annum.

If the debt is continually re-balanced, what is the APV of the project?

2. Part of the entrepreneurial process in a competitive market economy involves

obtaining governmental control over the market so that a new product has some chance of being successful.

knowing from the start the proper output and price to set for each new product.

choosing the best structure, size, and scope of production for the firm to produce a new product.

knowing in advance with certainty what products consumers will want to buy.

Reference no: EM131925108

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