What would explain the change

Assignment Help Finance Basics
Reference no: EM13264702

Taste Good Chocolates develops a new candy and plans to sell each bar for $1. Tast Good predicts that 1 million candy bars will be sold in the first year if the new candy bar is produced and sold, and includes $1 million of incremental revenues in its capital budgeting analysis. A senior executive in the company believes that 1 million candy bars will indeed be sold, but lowers the estimate of incremental revenue to $700,000. What would explain the change?

a. Cannibalization of 300,000 of Taste Good Chocolate's other candy bars
b. Excessive marketing costs to sell the 1 million candy bars
c. A lower discount rate
d. A higher selling price for the new candy bars

Reference no: EM13264702

Questions Cloud

Political risk arises-democratic and totalitarian government : Political risk arises from all of the following sources EXCEPT. An important distinction between democratic and totalitarian governments is the
What is the npv of accepting the system : What will be the annual net savings? Assume that the T-bill rate is 2.6 percent annually.
What is the estimated price of a share of storico stock : Storico just paid a dividend of $0.45 per share. The company has an ROE of 9% and a book value of $15 per share. The required return on investment is 12%. What is the estimated price of a share of Storico stock?
Explain what minimum sample weight should be taken : A particular method is to be used to analyze an ore that contains 4.8% copper. What minimum sample weight should be taken if the relative error due to a 0.5 mg loss is to be smaller than .1%
What would explain the change : A senior executive in the company believes that 1 million candy bars will indeed be sold, but lowers the estimate of incremental revenue to $700,000. What would explain the change?
What is the npv of accepting the lockbox agreement : What is the NPV of accepting the lockbox agreement? (Round your answer to 2 decimal places)
How many vital figures will record in the age of the earth : most scientists agree that the earth is 4.5 billion years old. 50 years from noe, how many sig figs will we record in the age of the earth
What is the effect of this raw material price increase : Suppose the price of coffee beans increases by $0.20 per pound. What is the effect of this raw material price increase on the demand for roasted coffee? If one pound produces 50 cups of coffee, would the price of a cup of coffee rise by $0.01 ? Expla..
Mathematical equations using latex : To typeset documents that include titles, sections, lists, emphasis, verbatim environments, footnotes, tables of contents, and mathematical equations using LATEX

Reviews

Write a Review

Finance Basics Questions & Answers

  Identify positions related to function of a finance investor

In the Finance Industry, make a Web search and identify business fields in which different positions exist for that function. Identify at least 5 positions related to the function of a finance investor.

  Computation of bonds yield to maturity and yield to call

Computation of bonds yield to maturity and yield to call on bonds and Which yield might investors expect to earn on these bonds

  Question related to risk

Suppose you have a friend who is always getting into trouble by taking unwise risks. What advice, based on what you have learned in this course, would you give this person?

  Foreign transaction-foreign currency transaction

Differentiate between a foreign transaction and a foreign currency transaction. Please give an example of each.

  Which is the best measure for an asset held

Which is the best measure of risk for a single asset held in isolation, and which is the best measure for an asset held in a diversified portfolio?

  Determine the maximum amount for payment

The Bradshaw Corporation's most recent dividend was $6.75. The historical dividend payment by the firm shows a constant growth rate of 5% per year.

  Evaluate the effective annual interest rate associated

Credit standards and accounts receivable Evaluate the effective annual interest rate associated with loan

  Explain how interest rates impact the scenario

Create a scenario where an investor would benefit from using forward and future contracts to hedge and Explain how interest rates impact the scenario.

  Explain what the opm is all about

The Black Scholes OPM was a major break-through in find the value of Options and other types of investments. Please explain what the OPM is all about and what is it that gives investors some assurance of correctness when Valuing certain types of i..

  Discuss factors used to classify retail establishments

Discuss factors used to classify retail establishments and list the types within each classification.

  Describe zero cost collar

Using the option prices given below, give an example of a zero cost collar and describe how it could be used to hedge a long position in the underlying asset.

  Determine the expected activity lengths and variances

Use the activity table below to determine the expected activity lengths and variances for each of the activities, using the beta distribution.

Free Assignment Quote

Assured A++ Grade

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!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd