(11) Your company is considering purchasing another company for $10 million. The present value of the cash flow from the company is projected by your staff to be $9 million. You believe you can even further improve the profitability of the company buy reducing the annual costs of the company by $1 million per year for the next 10 years. You have alternative investments available to you that earn 10% returns. What is the NPV of this purchase??

(14) All of Southwest airlines competitors adopt the same jet engine maintenance programs as part of their strategy to improve. Do you expect the overall profitability of the industry to improve?

Yes No

(15) Apples new strategy is to focus on producing iPhones that are made with a black case. Do you think this strategy is likely to be distinctive and can improves its profit?

Yes No