Calculate the payback period and the return on investment, Business Law and Ethics

A company seeing the prevalence of HIV transmission due to unprotected sexual intercourse in a country and the societal norms preventing the open use of condoms sees an opportunity in automatic coin-operated condom dispensing machines. The machine when placed in a discreet place allows a person to autonomously acquire a condom at an affordable price. The company expects to install about 150 dispensing machines at different locations:

? Hotels: 50
? Bars/Pubs/Disco: 50
? Shopping Malls: 15

Secondary schools and Universities: 35 (it expects no opposition from the Education authorities)

The company has managed to get a manufacturer from China who can supply a condom dispensing machine at Rs 20,000 per unit (it expects it will get an exemption on taxes on the product as it is a positive step for the health of people).

Each dispensing machine can contain 100 condoms. Each condom is expected to be purchased at a bulk price of Rs6 per unit and sold at a price of Rs10 per unit. The company estimates that each machine will sell about 400 condoms per month. The company expects to have one employee(with a salary of Rs5,000 per month) who will refill the condoms and attend to any repairs.

Question 1:

(a) Calculate the payback period, the Return on investment and the Net Present Value of the project.

(b) Using the above results, appraise the project economically discussing the returns, the level of risk and the overall economic feasibility.

(c) Challenge any TWO assumptions which are given in the case and discuss their impact on the economic feasibility of the project.

Question 2:

(a) Describe TWO risks involved for a company to get involved in the business of condom dispensing machines?

(b) Quantify the risk exposure of the above TWO risks.

(c) How could the above TWO risks be mitigated by the company?

(d) Comment on the operational feasibility of this project in the Mauritian context.

Posted Date: 11/28/2013 4:14:13 AM | Location : United States

Related Discussions:- Calculate the payback period and the return on investment, Assignment Help, Ask Question on Calculate the payback period and the return on investment, Get Answer, Expert's Help, Calculate the payback period and the return on investment Discussions

Write discussion on Calculate the payback period and the return on investment
Your posts are moderated
Related Questions
Creditors meeting - winding up: The creditors' meeting is convened for the same day at a later time than the members' meeting or it is held the following day.  One of the dire

Assignments should be submitted on or before the due date. Zero mark will follow late submission of an assignment unless you have an acceptable reason approved by the instructor.

Question 1: Arbitration, a form of alternative dispute resolution, is a legal method for the resolution of disputes outside the courts, where the parties to a dispute refer it

Question 1 A contract comprises od reciprocal promises. In the contract of sale who is an unpaid seller? Describe the remedies for breach of contract under Sale of Goods Act, 1930

how do i answer a problem question in law base on the law of contract for final assesment

REGULATIONS REGARDING ELECTRICITY : You are aware that electricity is the most common and convenient source of power. You know that carelessness in handling or maintenance of elec

Brief theoretical conceptualization of  Multiple Equilibria We now come to a brief theoretical conceptualization which may give us a basis for choice of agenda or a policy prop

1. Indicate whether the following statements are true or false and briefly explain your answer. a. Actions by government to increase spending and by the central bank to increase

State the legal consequences of an wrongful act Article 28, 30 and 31 state the legal consequences of an internationally wrongful act. They are as follows:- Article 28: Lega