{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Answers Homework 5a

Answers Homework 5a - Disocount rate 15 Output area NPV of...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 8 Question 4 Input area: Machine cost $200,000 Life of machine 5 Price per unit $25 Variable cost per unit $5 Fixed costs $350,000 Tax rate 25% Discount rate 12% Output area: EAC $55,481.95 Financial breakeven 20,532.13
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Chapter 8 Question 8 Input area: Go to market now: Probability of success 55% Market research: Cost $1,000,000 Probability of success 70% NPV if successful $30,000,000 NVP if unsuccessful $3,000,000
Background image of page 2
Background image of page 3
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Disocount rate 15% Output area: NPV of going to market now $17,850,000.00 NPV of market research $18,043,478.26 The company should use the market research since this option has the highest NPV. Chapter 9 Question 10 Input area: Stock retu 55.20% Average i 4.20% Average T 5.10% Output area: a. Average real return 48.94% b. Average nominal risk premiu 50.10%...
View Full Document

{[ snackBarMessage ]}