f ion 1. Mali Business is evaluating the introduction of a new product. The possible levels...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
f ion 1. Mali Business is evaluating the introduction of a new product. The possible levels of unit sales and the probabilities of their occurrence are given next: Possible Market Reaction Sales in Units Probabilities Low response 20 0.10 Moderate response 40 0.30 High response 55 0.40 Very high response 70 0.20 a. Use the risk management tools and estimate the expected value of unit sales for the new product? (5 marks) b. Using the risk management techniques find the standard deviation of unit sales? (5 marks )Note: Do not round intermediate calculations. Round your answer to 2 decimal places. 2. Keller Construction is considering two new investments. Project E calls for the purchase of earthmoving equipment. Project H represents an investment in a hydraulic lift. Keller wishes to use a net present value profile in comparing the projects. Evaluate the best project using the investment and cash flow patterns given below. Project E ($52,000 Investment) Year 1 2 3 Cash Flow Year 1 14,000 2 24,000 3 Project H ($47,000 Investment) $ 10,000 Cash Flow $ 27,000 19,000 15,000 a. Project E ($52,000 Investment) Year 1 2 3 4 Cash Flow 7 Year $ 10,000 1 14,000 2 24,000 3 31,000 Evaluate the net present value of the projects based on a zero percent discount rate. (4 marks) b. Evaluate the net present val of the projects based on a discount rate of 9 percent. (4 marks) A▾ B I Project H ($47,000 Investment) Note: Do not round intermediate calculations and round your answers to 2 decimal places. C. If the projects are not mutually exclusive, evaluate which project(s) would you accept if the discount rate is 9 percent? (2 marks) E !!! Cash Flow III $ 27,000 19,000 15,000 Ordered list f ion 1. Mali Business is evaluating the introduction of a new product. The possible levels of unit sales and the probabilities of their occurrence are given next: Possible Market Reaction Sales in Units Probabilities Low response 20 0.10 Moderate response 40 0.30 High response 55 0.40 Very high response 70 0.20 a. Use the risk management tools and estimate the expected value of unit sales for the new product? (5 marks) b. Using the risk management techniques find the standard deviation of unit sales? (5 marks )Note: Do not round intermediate calculations. Round your answer to 2 decimal places. 2. Keller Construction is considering two new investments. Project E calls for the purchase of earthmoving equipment. Project H represents an investment in a hydraulic lift. Keller wishes to use a net present value profile in comparing the projects. Evaluate the best project using the investment and cash flow patterns given below. Project E ($52,000 Investment) Year 1 2 3 Cash Flow Year 1 14,000 2 24,000 3 Project H ($47,000 Investment) $ 10,000 Cash Flow $ 27,000 19,000 15,000 a. Project E ($52,000 Investment) Year 1 2 3 4 Cash Flow 7 Year $ 10,000 1 14,000 2 24,000 3 31,000 Evaluate the net present value of the projects based on a zero percent discount rate. (4 marks) b. Evaluate the net present val of the projects based on a discount rate of 9 percent. (4 marks) A▾ B I Project H ($47,000 Investment) Note: Do not round intermediate calculations and round your answers to 2 decimal places. C. If the projects are not mutually exclusive, evaluate which project(s) would you accept if the discount rate is 9 percent? (2 marks) E !!! Cash Flow III $ 27,000 19,000 15,000 Ordered list
Expert Answer:
Answer rating: 100% (QA)
1 Mail Business a Calculate the expected value of unit sales The expected value is calculated by multiplying each possible sales level by its correspo... View the full answer
Related Book For
Accounting Information Systems
ISBN: 978-1133935940
10th edition
Authors: Ulric J. Gelinas, Richard B. Dull
Posted Date:
Students also viewed these management leadership questions
-
Demonstrate your understanding of the terms by using them correctly. Creativity is encouraged by not required; a realistic scenario would be best. Terms: Harassment, Severe/pervasive, Vicarious...
-
BUSINESS PLAN ASSIGNMENT 1. The Business Plan project (for a new business) is to be completed and submitted on Day 15. Most days will allow time for in class work plan. However, it will still be...
-
You will prepare a Cash Flow Statement for Clarks Sporting Goods and then you will calculate ratios for Sams Paint and Drywall. Case 1: Clarks Sporting Goods Dave Clark plans to open a sporting goods...
-
Write a Fortran program that creates an integer array with values -123, -4, 5, 67, 890, and 12345. Prints out the array in several formatted ways. a. Print each element, on its own line, using a...
-
The probability that a college student will cheat on his or her statistics assignment by copying the work of other students is 0.043. If a professor has 175 statistics students, what is the...
-
The Solow model assumed that there are constant returns to scale and that increases in capital and labour are subject to diminishing marginal product. What if these assumptions are relaxed?...
-
For a listed company in either hospitality, tourism or events review a set of their accounts. How does their reporting format link to IFRS format. Apart from the financial statements named in this...
-
The International Accounting Standards Committee (IASC) was formed in 1973. In 2001 the IASC was replaced by the International Accounting Standards Board (IASB). Required: a. What was the purpose of...
-
American General offers a 18-year annuity with a guaranteed rate of 6.47% compounded annually. How much sho you pay for one of these annuities if you want to receive payments of $1300 annually over...
-
Regulators, in protecting the public interest, are examining Wincox Insurance Company's financial statements. These regulators impose requirements on Wincox's financial statements because of which...
-
Please help me with this question . Polaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company can produce and sell 48,000 Rets per year. lCosts...
-
Len is asked to design a small water pump for an aquarium. The pump should deliver \(18.0 \mathrm{Lpm}\) of water at a net head of \(1.6 \mathrm{~m}\) at its best efficiency point. A motor that spins...
-
Why is it important to create a final project report, presentation, and lessons-learned report?
-
The following actions by a CPA may involve violations of the Rules of Conduct: 1. Agrees to be the committee chairperson for a local fund-raising activity. 2. Serves as an executor and trustee of the...
-
What type of information do you see in the Earned Value table?
-
What are the conditions associated with liability under Rule \(10 \mathrm{~b}-5\) of the 1934 Act?
-
Contributed services in not-for-profit organizations are only recorded in certain circumstances. Locate the citation in the FASB ASC that defines when donated services are recognized. Enter your...
-
What recommendations would you make to Big Four firms to help them (1) avoid confrontations with governmental officials in an authoritarian society and (2) deal effectively with such confrontations...
-
Some people believe that an automated accounting system is always bet-ter than a manual system. Describe circumstances where you would recom mend a manual system rather than automation. Provide an...
-
Refer to Figure 6.12. To implement a many-to-many (M:N) relationship between two relations, the figure demonstrates creating a new relation with a composite key made up of the primary keys (Client_No...
-
Identify a specific situation in which periodic processing is sufficient to support the business process, and a second situation where immediate processing is necessary to adequately support the...
-
Explain the criteria that a deferred tax provision needs to satisfy under IAS 12 in order to be accepted as a liability in the balance sheet.
-
A fixed asset (a machine) was purchased by Adjourn plc on 1 July 20X1 at a cost of 25,000. The company prepares its annual accounts to 31 March in each year.The policy of the company is to depreciate...
-
The Mission Company Ltd, whose year-end is 31 December, has acquired two items of machinery on leases, the conditions of which are as follows: Item Y: Ten annual instalments of 20,000 each, the first...
Study smarter with the SolutionInn App