Internal rates of return , Basic Statistics

A consumer product firm finds that its brand of laundry detergent is losing market share, so it decides that it needs to "freshen" the product. One strategy is to maintain the current detergent formula but to repackage the product. The other strategy involves a complete reformulation of the product in a way that will appeal to environmentally conscious consumers. The firm will pursue one strategy or the other but not both. Cash flows from each proposal appear below, and the firm discounts cash flows at 13%.

Year

Repackage

Reformulate

0

- $3,000,000

- $25,000,000

1

2,000,0000

10,000,000

2

1,250,000

9,000,000

3

500,000

7,000,000

4

250,000

4,000,000

5

250,000

3,500,000

 

(a)   What strategy will you plan to take an appropriate decision?

(b)   Rank these investments based on their pay back periods.

(c)    Rank these investments based on their net present values (NPVs).

(d)   Rank these investments based on their internal rates of return (IRR).

(e)   Do these investment rankings yield mixed signals?

Posted Date: 2/22/2013 5:56:06 AM | Location : United States







Related Discussions:- Internal rates of return , Assignment Help, Ask Question on Internal rates of return , Get Answer, Expert's Help, Internal rates of return Discussions

Write discussion on Internal rates of return
Your posts are moderated
Related Questions
A probability distribution is partially given in the following table with the additional information that the even values of X are equally likely. Determine the missing entries in

The  χ 2  test is one of the most popular statistical inference procedures today. It is applicable to a very large number of problems in practice which can be summed up under th

1. Warm-up Exercise Volumes I, II, III, and IV of Shakespeare are in sequence next to one another in the library bookcase.  Each volume has 2" of pages and the front and back co

A teacher is interested in comparing the effects of 3 different parts of rehearsal methods (Rote rehearsal, Imagery, and Story) on number of words recalled. Participants are random

This methods implies the collection of information by way of investigator own observation without interviewing the respondents. While the observational methods may be suitabl

In a survey of 284 smokers, 197 smokers reported that they wanted to quit smoking. Compute a 90% confidence interval for the true proportion of smokers that want to quit smoking.

Arnold Palmer and Tiger Woods are two of the best golfers ever to play the game. To show how these two golfers would compare if both were playing at the top of their game, the foll



#qa national poll of 1836 respondents indicated that 36% support the NDP. Test whether this is sufficient evidence to show that the NDP support has increased since the election. Us