Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Your company is planning to introduce a new online shopping service. To reduce risk, senior management propose developing the service in three stages: a) A market test for one year with a few customers at a cost of $1 million. The likelihood of success for this test is estimated to be 75%. b) A introductory period of one year, if the market test is successful. During this test the most widely ordered products would be available through the service to a wider audience. This phase of the project is estimated to cost $2.5 million with have a 50% chance of success. c) Full roll-out of the service at the end of the second year if the introductory period is successful. This phase is estimated to cost $15 million and is expected to start generating revenue only by the end of the third year. There are 3 possible outcomes from the full roll out: Outcome Probability Year 4 Revenue Year 5 Revenue Year 6 Revenue Year 7 Revenue Huge Success 25% $12M $15M $18M $21M Moderate Success 50% $7M $9M $11M $13M Failure 25% -$3M -$4M -$5M -$6M i) Construct a decision tree and list all the outcomes and cumulative probabilities (it may be easier to construct the tree in a different program and copy and paste into Excel) ii) Assume all the values are present values. Should the company pursue this project based on the expected NPV?
Several years ago, the hospital needed additional space and issued bonds to finance the purchase of a new building. Each bond has a face value of $15,000, a 3.8% coupon rate, and a maturity of 20 years. Interest is paid semiannually. The current mark..
Redneck Farm Equipment owes $48,329 in tax on a taxable income of $549,600. The company has determined that it will owe $56,211 in tax if its taxable income rises to $565,000. What is the marginal tax rate at this level of income?
A security analyst obtained the following information from Prestopino Products' financial statements. The company's net cash flow (NCF) for 2015 was $150,000.
A small business owner visits her bank to ask for a loan. The owner states that she can repay a loan at $3,000 per month for the next three years and then $6,000 per month for two years after that. If the bank is charging customers 10.00 percent APR,..
Consider a lottery that pays to the winner an annuity of $950 that begins at the end of the first year and continues at the end of each consecutive year for a total of 9 years with one exception. Because of high administrative costs associated with r..
Which of the following securities is often used for the purpose of capturing the closest to a risk free interest rate?
Which of these will occur in a world with taxes and financial distress when a firm is operating at its optimal capital structure?
1. suppose that the market contains three stocks a b and c and two systematic risk- factors 1 and 2 that have the
You are planning to save for retirement over the next 25 years. To do this, you will invest $1,500 a month in a stock account and $1,400 a month in a bond account. The return of the stock account is expected to be 10 percent, and the bond account wil..
Prof. Chaos considers which device to purchase. What is the present worth of Device B?
JWG Company publishes Creative Crosswords. Last year, the book of puzzles sold for $10, with a variable operating cost of $8 per book and a fixed operating cost of $40,000. How many books must JWG sell this year to achieve the breakeven point for the..
The appropriate discount rate for the following cash flows is 7 percent compounded quarterly. What is the present value of the cash flows?
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd