User Account

All Pages

What is the expected net present value of the business

Assignment Help Accounting Basics
Reference no: EM133169420

Question - May acquire an existing business for $2 million. You are unsure of future demand. There is a 50% chance of high demand, in which case the present value of the business will be $3 million. There is a 30% chance of moderate demand, and the associated present value is $1.5 million. Finally, there is a 20% chance of low demand, in which case the present value is $1 million. Draw a decision tree for this problem. What is the expected net present value of the business? Should you invest? Explain.

Reference no: EM133169420

Questions Cloud

Good customer service or simply revenue generation : In your opinion, is this part of good customer service or simply revenue generation for the company?
What price should the first scenario option sell : If Edward believes that he needs to get a bonus of $20,000 per year, for what price should the first scenario option sell for at the end of 10 years
Salesperson attitude and product pitch and promise : Did the salesperson make a sales pitch? If so, what were some of the key highlights of it? How did the salesperson get your attention?
Conduct meeting in relation to organisational change : Conduct Meeting in Relation to Organisational Change - Discuss and identify requirements for change for change that support organisational objectives
What is the expected net present value of the business : Draw a decision tree for this problem. What is the expected net present value of the business? Should you invest? Explain
Identify two strategies for embedding change : Identify two strategies for embedding change within an organisation and Provide an explanation for each of the identified strategies
How much is the carrying value of the investment : Cash dividends of P12,000 were declared on January 5, 2021. How much is the carrying value of the investment in associate at the end of the year 2020
Powerpoint presentation on intrepid travel : What they plan on doing post pandemic (with Media Marketing) to help ease customers back into traveling.
Determine the contribution margin per ham : During the current year 11,000 hams were sold resulting in Php220,000 of sales revenue, Determine the contribution margin per Ham

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +91-977-207-8620

Phone: +91-977-207-8620

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd