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

The smallest total monthly cost , Each month, the firm Cashco has 50% chanc...

Each month, the firm Cashco has 50% chance that an amount of $ 1,000 will be credited In its current account, and a 50% chance that the account is debited $ 1,000. As current accou

Data for ogive graph, Data for ogive graph in sectors of indian economy

Data for ogive graph in sectors of indian economy

Components of time series, What are the components of time series? Bring ou...

What are the components of time series? Bring out the significance of moving average in analysing a time series and point out its limitations

Chi squared, I am using chi squared statistic on a 10 point Likert scale. I...

I am using chi squared statistic on a 10 point Likert scale. I am then trying to analyses if there is any difference between two groups of respondents....male and female. How do Ic

Bartlett test, what are the statistics hypotheses for bartlett''s test for ...

what are the statistics hypotheses for bartlett''s test for exponential distribution?

Assumed means deviations in f2 test, Assumed Means Deviations in F2 Test : ...

Assumed Means Deviations in F2 Test : When actual means of X and Y variables are in fractions the calculations can be simplified by taking the deviations from assumed means. When d

Managing Ashland, calculate the probabilities correct to 6 decimal places. ...

calculate the probabilities correct to 6 decimal places. Let pie = 0.02. a. P(X less than 3,

Operation research, Meaning and solving example using north-west corner in ...

Meaning and solving example using north-west corner in Transportation problem

methods of collecting primary data, Distinguish between primary and second...

Distinguish between primary and secondary data. What are the methods of collecting primary data?

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