Abbott wants to increase their marketing for Pedialyte leading up to St. Patrick's Day this year. They launch a Superbowl ad on 2/13/2022, costing them $5,000,000, and they launch a secondary campaign in early March (3/6) costing $800,000. They expect to see sales starting at $500,000 on 2/20, increasing by 20% every week for 6 weeks. Assuming a MARR of 12%, what is the present value of this project at the start of the campaign if they stop attributing sales to this on 4/3/2022? $602,449 $597,437 $563,446

Abbott wants to increase their marketing for Pedialyte leading up to St. Patrick's Day this year. They launch a Superbowl ad on 2/13/2022, costing them $5,000,000, and they launch a secondary campaign in early March (3/6) costing $800,000. They expect to see sales starting at $500,000 on 2/20, increasing by 20% every week for 6 weeks. Assuming a MARR of 12%, what is the present value of this project at the start of the campaign if they stop attributing sales to this on 4/3/2022? $602,449 $597,437 $563,446

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter17: Long-term Investment Analysis

Section: Chapter Questions

Problem 7E

See similar textbooks

Similar questions

Consider three investment plans at an annual rate of 9.38%. • Investor A: Invest $2000 per year for the first 10 years of your career. At the end of 10 years, make no further investments, but reinvest the amount accumulated at the end of 10 years for the next 31 years. • Investor B: Do nothing for the first 10 years. Then start investing $2000 per year for the next 31 years. • Investor C: Invest $2000 per year for the entire 41 years. Note that all investments are made at the beginning of each year, the first deposit will be .made at the beginning of age 25 (n=0), and you want to calculate the balance at age of 65 (n=41).
CustomMetalworks is considering the expansion of their cablefabrication business for towers, rigging, winches, and many other uses. Theyhave available $250,000 for investment and have identified the followingindivisible alternatives, each of which will provide an exit with full return ofthe investment at the end of a 5-year planning horizon. Each year,CustomMetalworks will receive an annual return as noted below. MARR is12%.Investment Initial Investment Annual Return1 $25,000 $7,5002 $40,000 $12,0003 $85,000 $20,0004 $100,000 $22,0005 $65,000 $17,000For the original problem:a. Which alternatives should be selected by CustomMetalworks?b. What is the present worth for the optimum investment portfolio?c. What is the IRR for the optimum investment portfolio?In addition to the original opportunity statement, CustomMetalworks hasdetermined that investments 3 and 4 are mutually exclusive andinvestment 5 is contingent on either investment 1 or 2 being funded.d. Now, which alternatives should…
Carlisle Company has been cited and must invest in equipment to reduce stack emissions or face EPA fines of $22,500 per year. An emission reduction filter will cost $95,000 and will have an expected life of 5 years. Carlisle’s MARR is 9 %/year. What is the present worth of this investment? $Carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is ±5.
A FATHER WISHES TO PROVIDE P4,000.00 FOR HIS SON ON HIS 21ST BIRTHDAY. HOW MUCH SHOULD HE DEPOSIT EVERY 6 MONTHS IN A SAVINGS BANK WHICH PAYS 3% CONVERTED SEMI-ANNUALLY, IF THE FIRST DEPOSIT IS MADE WHEN THE SON IS 3 1/2 YEARS OLD? a.P67.88 b.P63.22 c.P65.20 d.P63.90
An advertising campaign will cost $ 200 000 for planning and $ 40 000 in each of the next six years. It is expected to increase revenues permanently by $ 40 000 per year. Additional revenues will be gained in the pattern of an arithmetic gradient with $ 20 000 in the first year, declining by $ 5000 per year to zero in the fifth year. What is the IRR of this investment? If the company’s MARR is 12 percent, is this a good investment? answer should be=12.4%
You are considering an apartment building project that requires an investment of $15, 000, 000. This building has 30 units and you expect the maintenance cost for the apartment building to be $400, 000 the first year which will continue to increase by $50, 000 every year in sub-sequent years. The cost to hire a manager for the building is estimated to be $100, 000 per year. After 6 years of operation, the apartment building can be sold for $16, 000, 000. If the monthly rent per apartment unit is $5, 000, what would be the rate of return on this investment? Assume that the building will remain fully occupied during its six years of operation. In your analysis, you are expected to: (i) Use Excel to display the cash flow; (ii) Draw a Cash Flow Diagram; (iii) Use Excel to compute the internal rate of return of the CFD. use excel
A certain warehouse is worth Php 1,650,000. The average value of the merchandise in the warehouse is Php 1,500,000. The annual insurance rate on the warehouse is 1% and the merchandise stored in the warehouse is 0.9%. A proposal for the installation of a fire sprinkler is being considered. The system will cost Php 80,000 and will effect a savings of 70% in both insurance premiums. Monthly maintenance is estimated to be Php 500 and annual taxes is Php 4,000 for the sprinkler system. The owners of the warehouse, demand that the investment in such equipment be written-off within 10 years. Invested capital can be expected to earn minimum return of about 17%. Would you advice the installation? (Use ROR)
True/False AVC can fall even when MC is rising
On average, it needs P250,000 per year and an additional P600,000 every 4 years for major repairs to maintain a certain three-storey office building. How much must be paid now to take care of these payments on a bank that offers 8% per year? choices: none of the above P143,999.078 P4,789,355.06 P5,000,000.06
A businessman is faced with the prospect of fluctuating future budget for the maintenance of the generator. During the first 5 years, P1,000 per year will be budgeted. During the second five years, the annual budget will be P1,500 per year. In addition, P3,500 will be budgeted for an overhaul of the machine at the end of the fourth year and another P3,500 for an overhaul at the end of 8th year. Assuming compound interest at 6% per annum, what is the equivalent annual cost of maintenance?
Abbott wants to increase their marketing for Pedialyte leading up to St. Patrick's Day this year. They launch a Superbowl ad on 2/13/2022, costing them $5,000,000, and they launch a secondary campaign in early March (3/6) costing $800,000. They expect to see sales starting at $500,000 on 2/20, increasing by 20% every week for 6 weeks. Assuming a MARR of 12%, what is the present value of this project at the start of the campaign if they stop attributing sales to this on 4/3/2022?O. $602,449O. $597437O. $563,446O. $321,998
Abbott wants to increase their marketing for Pedialyte leading up to St. Patrick's Day this year. They launch a Superbowl ad on 2/13/2022, costing them $5,000,000, and they launch a secondary campaign in early March (3/6) costing $800,000. They expect to see sales starting at $500,000 on 2/20, increasing by 20% every week for 6 weeks. Assuming a MARR of 12%, what is the present value of this project at the start of the campaign if they stop attributing sales to this on 4/3/2022? Group of answer choices $563,446 $602,449 $321,998 $597,437