Marketplace demand for a type of carpet

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Reference no: EM1311715

Q1. Suppose that an investment project has an immediate cost of $100 million followed by costs of $50 million at the end of one year also a further $25 million at the end of 2 years. Net revenues (i.e., revenues in excess of operating costs) accrue in the amount of $16 million at the end of every year beginning in 3 years' time. Find the net present value of this investment project given an interest rate of 9%.

Q2. The marketplace demand for a type of carpet produced by a monopolist known as KP-7 has been estimated as:
P = 40 - 0.25Q,
where P is price ($/yard) also Q is sales (hundreds of yards every month).
The firm's total cost function given as:
C = 100 - 20.0q + 2.0Q2

Reference no: EM1311715

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