Which one of the following would NOT result in incremental cash flows and thus should NOT be included in the capital budgeting analysis for a new product?
A. A firm has a parcel of land that can be used for a new plant site or be sold, rented, or used for agricultural purposes.
B. A new product will generate new sales, but some of those new sales will be from customers who switch from one of the firm's current products.
C. A firm must obtain new equipment for the project, and $1 million is required for shipping and installing the new machinery.
D. A firm has spent $2 million on research and development associated with a new product. These costs have been expensed for tax purposes, and they cannot be recovered regardless of whether the new project is accepted or rejected.
E. A firm can produce a new product, and the existence of that product will stimulate sales of some of the firm's other products.
Answer: D
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Cheery Company follows IFRS for its financial reporting. On January 1, 2018 Cheery issued €250 million of 10-year convertible notes that pay interest at 5% annually. Investors pay €250 million for the notes even though the company's credit risk at the time implies a 10% interest rate for traditional debt of similar duration. When the cash flows associated with the debt are discounted at 10%, the resulting value is €175 million. How much cash will Cheery pay for interest during 2018?
A. €25 million B. €8.75 million C. €12.5 million D. €17.5 million
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A) inelastic demand B) direct purchasing C) fluctuating demand D) derived demand E) a straight rebuy
Which of the following is not a characteristic of a radical/breakthrough innovation?
a. superior functional performance over "old" technology b. "supply side" market c. development led by marketing d. specific market opportunity or need of only secondary concern e. technology push
A power of attorney can permit an agent to transact all business for a principal.?
Indicate whether the statement is true or false