Internal rates of return , Basic Statistics

Assignment Help:

A consumer product firm finds that its brand of laundry detergent is losing market share, so it decides that it needs to "freshen" the product. One strategy is to maintain the current detergent formula but to repackage the product. The other strategy involves a complete reformulation of the product in a way that will appeal to environmentally conscious consumers. The firm will pursue one strategy or the other but not both. Cash flows from each proposal appear below, and the firm discounts cash flows at 13%.

Year

Repackage

Reformulate

0

- $3,000,000

- $25,000,000

1

2,000,0000

10,000,000

2

1,250,000

9,000,000

3

500,000

7,000,000

4

250,000

4,000,000

5

250,000

3,500,000

 

(a)   What strategy will you plan to take an appropriate decision?

(b)   Rank these investments based on their pay back periods.

(c)    Rank these investments based on their net present values (NPVs).

(d)   Rank these investments based on their internal rates of return (IRR).

(e)   Do these investment rankings yield mixed signals?


Related Discussions:- Internal rates of return

Chi-square Test, six subjects were exposed to 4 treatments and the followin...

six subjects were exposed to 4 treatments and the following data were recorded

Major advantages of the single entry system, What are the major advantages ...

What are the major advantages of the Single Entry System? Ans. A Single Entry system is considered to be the most simplest method to record the financial transaction, only cash bo

Linear regression, Question: Students in a science class have just rece...

Question: Students in a science class have just received their grades on the first test.  The instructor has provided information about the first test grades in some previous c

General insurance accounts preparation and Regulation of inv, X Ltd had 100...

X Ltd had 100000 9% redeemable preference shares of Rs.100 each full paid. The company decided to redeem these pref. shares at par by issue of sufficient number of equity shares of

Homophone disambiguation-unigram-bigram model , The BBC hosts a homophone q...

The BBC hosts a homophone quiz on its website; your task for this lab is to develop an automatic method for completing the quiz, with the aim being to get as high a score as possib

Difference between an unadjusted trial balance and an adjust, Difference be...

Difference between an unadjusted trial balance and an adjusted trial balance? The variations between unadjusted test stability and altered test stability are the amounts registe

Define Manufacturing Overhead Costs, In the financial statements, each prod...

In the financial statements, each product must include the costs of the given below: Direct labor Direct material Manufacturing or factory overhead The costs that would typically b

Using a venn diagram evaluate the probability, Question: (a) 100 indiv...

Question: (a) 100 individuals applied for systems analyst positions with a large firm during the past year. 40 of them had some prior work experience (W), and 30 had a profes

Write Your Message!

Captcha
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