Franzi and tony expected npv

Reference no: EM131016940

Tony and Franzi, after graduating from the DMBA program, decide to launch a venture "Likable Lunches." To do this, Franzi would need to invest $1,000 at t=0 for the ingredients and menu development for these lunches. The assumption is that there is a 70% chance that this phase will be successful and will continue. If this stage is not successful, the lunch project would be scrapped with no left overs :( The second stage would consist of designing packaging and delivery of these lunches. This is estimated to cost $25,000 at t =1. If the lunch design and delivery test well, Franzi and Tony would then go into production. If they do not, the designs could be sold for $5,000. Success for the second stage is estimated at 85%. The third and final stage consists of purchasing an old Delmonte plant for lunch production. This would cost $200,000 at t =2. If the lunch economy is strong, the net value of sales would be $600,000; if the lunch economy is in recession, the net value would be $300,000. There's a 50-50 chance of strong or weak lunch economy. Franzi's and Tony's Cost of Capital is 10%. What is Franzi's and Tony's expected NPV?

Reference no: EM131016940

Questions Cloud

There are many firms providing differentiated products : .Some companies want to get their products into as many outlets as possible. These companies understand that the more exposure they get, the more of their products they'll sell.

Patrol for illegal immigration activities : Timothy Moher owns 440 acres of land on sugar land Michigan. Sugar land is located on St. Mary's River which marks the international border between Canada and the United States. Mohers land is 2 miles from Canada.

Find the lu factorization of the given matrix a : Find the LU factorization of the matrix A given below. Use this factorization to efficiently solve the systems of equations Ax→ = L(U x→) = bi→ for the bi→'s given below.

Economic crisis to afflict the united states : As of today the most severe economic crisis to afflict the United States economy is considered to be

Franzi and tony expected npv : There's a 50-50 chance of strong or weak lunch economy. Franzi's and Tony's Cost of Capital is 10%. What is Franzi's and Tony's expected NPV?

Determine the mass flow rate of dry air required : The heated air is then allowed to pass over the materials being dried, exiting the dryer at 150°F, 1 atm, and 30% relative humidity. If moisture is to be removed from the materials at a rate of 2700 lb/h, determine the mass flow rate of dry air re..

Why is this relevant and what is the role of leadership : Why is this relevant and what is the role of leadership?

Is every function a relation : What is the difference between an equation that is a function and one that is not - Is every function a relation? Is every relation a function?

Determine the temperature of the exiting moist air stream : Saturated water vapor at 230°F is sprayed into the moist air, which then exits the device at a relative humidity of 50%. Heat transfer between the device and its surroundings can be ignored, as can kinetic and potential energy effects. Determine t..

User Account

All Pages