Exquisite gowns for special occasions on prepaid basis

Assignment Help Financial Management

Reference no: EM131348732

Lenora’s creates exquisite gowns for special occasions on a prepaid basis only. The required return is 12.5 percent. The estimate for one gown order has cash flows of $165,000 in year 0 and -$188,000 in year 1. Which of these statements correctly applies to this order? Please show work to explain the answer

The gown should not be sold for $165,000.

As long as the selling price is $164,819 or higher, the gown should be sold.

The gown must be sold for a minimum price of $167,111 to earn the required return.

The IRR decision rule cannot be applied to this project.

Insufficient information is provided to make a decision based on IRR.

Reference no: EM131348732

Questions Cloud

Thresholds and feedback loops : a.) Complex systems such as the climate are characterized by thresholds and feedback loops. Describe 2 positive feedback loops for global climate change. Describe 2 negative feedback loops for global climate change.

Determine the partial pressure of the water vapor : Determine the partial pressure of the water vapor in the Martian atmosphere.- The mass fractions of all the gases in the Martian atmosphere.

Purposes of global economic comparison : 1. "500-1750, Western Europe can be considered largely as a single economic system.While the location of the most advanced region or nation varied over time, this was merely change within an overall system which, can for purposes of global econom..

What is the relative humidity in the room : An engineer at a party is handed a cold glass of beverage with ice in it.- What is the relative humidity in the room when moisture just begins to condense on the outside of the glass?

Exquisite gowns for special occasions on prepaid basis : Lenora’s creates exquisite gowns for special occasions on a prepaid basis only. The required return is 12.5 percent. The estimate for one gown order has cash flows of $165,000 in year 0 and -$188,000 in year 1. Which of these statements correctly app..

Role of information systems in business : BIT 203 - Management Information Systems Discuss the role of Information Systems in business and compare between the various types of Information Systems.

Determine the maximum temperature of the glasses : Determine the maximum temperature of the glasses that just causes moisture droplets (i.e., "fog") to form when cleaned in this manner.

Culmination of a process : The phenomenon known as the Industrial Revolution was the culmination of a process that came together in the 1700-1800 period once a critical mass of circumstances came together is something like a "Perfect Storm." It is easy to describe what occu..

Determine the wet bulb temperature of the air : Determine the wet bulb temperature of the air before dehumidification,- the dew point temperature of the air after dehumidification.

User Account

All Pages