Invest in adding capacity to their drum product this year

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Reference no: EM132021454

1. Your Competitive Intelligence team is predicting that the Digby Company will invest in adding capacity to their Drum product this year. Assume Digby's product Drum invests in increasing its capacity by 10% this year. Because of this new information, your company anticipates all other products in the Core segment will increase their capacity by the same amount. How much can the industry produce in the Core segment the next year? Consider only products primarily in the Core segment last year. Ignore current inventories. Figures in thousands (000).

A) 8,525

B) 9,502

C) 13,583

D) 4,924

E) 3,948

F) 7,275

G) 8,252

2. A project will produce cash inflows of $3,100 a year for 3 years with a final cash inflow of $4,400 in Year 4. The project's initial cost is $10,400. What is the net present value if the required rate of return is 16%?

a. $2,188.98

b. -$311.02

c. $1,650.11

d. -$1,007.66

e. $1,168.02

Reference no: EM132021454

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