Internal rates of return , Basic Statistics

Assignment Help:

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?


Related Discussions:- Internal rates of return

Arithmetic mean, How do I find the mean when the question is in a table for...

How do I find the mean when the question is in a table format?2 rows with 8 columns, Do I name them X and Y then do them?

Strategy nash equilibrium, Consider a population of consumers uniformly dis...

Consider a population of consumers uniformly distributed along the interval from left-hand (x = 0) to right-hand (x=1). The mass of consumers is 1. There are two firms (F1 and F2)

Confidence interval, Ask quesA buffalo, your cola distributor is featuring ...

Ask quesA buffalo, your cola distributor is featuring a super-special sale on 12- packs. She wonders where in the grocery store to place the cola for maximum attention. Should it b

Use of Assets , Use of Assets A potential upcoming financial advantage acq...

Use of Assets A potential upcoming financial advantage acquired or managed by a particular business due to past purchases or activities. These financial options can be concrete or

Calculate relevant measures of central tendency, In order to derive meaning...

In order to derive meaningful results from the statistical tables the researcher may use one or more of the followings four steps: a.The first step is to calculate relevant meas

Wave optics, how does wave act as in interfrence?

how does wave act as in interfrence?

Determine the probability, Question 1: A mail-order firm has a circular...

Question 1: A mail-order firm has a circular which elicits a 10% response rate. Suppose 20 of the circulars are mailed as a market test in a new geographic area. Assuming that

Write Your Message!

Captcha
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!

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