Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please answer question 5-8 with the given information. (the charts are completly filled out). ACC 1820 Project 6 (Ch 9, 10, 11) Name Use Question

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed

Please answer question 5-8 with the given information. (the charts are completly filled out).

ACC 1820 Project 6 (Ch 9, 10, 11) Name Use Question 11 from HW 8 for Matheson Electronics to complete the requirements below. If your answer to requirement 2-b on CONNECT was "yes", skip to requirement 2. figures that will be provided items are check 1. If your answer to 2-b on CONNECT was "no", complete this requirement: Assume a new marketing study indicates that by increasing advertising costs by 20% in the years 1 and 2 only, the sales will double their original projections for year 1 and 50% higher than the projections for the second year. Projections for sales in years 3 through 6, as well as the cost assumptions would remain unchanged. What would the new Net Present Value be with these adjustments to advertising expense and sales? Should Matheson Electronics accept the device now? Show your work by include the Cash Flows for the appropriate years and the discount factors used in the table below 2. If your answer to 2-b on CONNECT was "yes", complete this requirement: Assume the company is concerned about its advertising budget and would like to decrease its advertising by 20% in years 1 and 2 A marketing study indicates that decreasing the advertising cost by 20% in the years 1 and 2 only, will decrease sales in the first and second year by 20%. Projected sales in years 3 through 6 as well as the cost assumptions would remain unchanged. What would the new Net Present Value be with these adjustments to advertising expense and sales? Should Matheson Electronics accept the device now? Show your work by include the Cash Flows for the appropriate years and the discount factors used in the table below Use these table for 1 or 2 (1O points Now Y1 Y2 Y3 Y4 Y5 Cash Flow Discount Factor Present Value Net Present Value ? 3. (6 points) Using the original assumptions from above, calculate the new NPV if the company a. decreased its rate of return by 2%. Should the company accept the new device now? Now YI Y2 Y4 Y5 Y6 Cash Flow Discount Factor Net Present Value 2015 b, increased its rate of return by 2%. Should the company accept the new device now? Now YI Y2 Y3 Y4 Y5 Y6 Cash Flow Discount Factor Present Value Net Present Value

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Finance questions