A firm estimates that the net present value of future cash flows from a new product will be $125,000. The firm estimates that they will spend $135,000 on product development and research. Based on these figures, what should the firm do?
a. Develop the product
b. Not develop the product
c. Release the product to market immediately
d. Cannot be determined from the information given
b. Not develop the product
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Which of the following was listed as an effective table guideline?
A) Use no or only one decimal place (12% or 12.2%) unless more are called for by convention ($12.23). B) Place items you want the reader to compare in the same column, not the same row. C) If you have many rows, darken alternate entries or double-space after every five entries to assist the reader to accurately line up items. D) Total columns and rows when appropriate (100%). E) Avoid totaling columns as this extra information can be confusing.
Which of the following, if discovered by Somber Company in the accounting period subsequent to the period of occurrence, requires the company to report the correction of an error?
a. The estimate of the useful life of a depreciable asset should have been revised. b. Capitalization of an expense c. A change from declining-balance depreciation method to straight-line method d. Change in percentage of sales used for determining bad debt expense
In calculating the cost of common stock equity, the model which describes the relationship between the required return and the nondiversifiable risk of the firm is ________
A) the constant-growth model B) the NPV model C) the variable growth model D) the capital asset pricing model
Yield to call represents the rate of return that investors earn if they buy a callable bond at a specific price and hold it until it is called back and they receive the call price, which would be set above the bond's par value
Indicate whether the statement is true or false