For mutually exclusive projects, which one should a firm undertake? McDonalds could open a new store either at location A or location B. Due to limited funds, the company can only open one store. The initial costs are the same. Location A: the future cash flow will be 630,000 with probability 50%, and 210,000 with probability 50%. Location B: the future cash flow will be 680,000 with probability 40%, and 200,000 with probability 60%.

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A:

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Q: $16,449

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A:

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Q: What information does the payback period provide? Suppose Omni Consumer Products's CFO is evaluating…

A: Payback period  refers to time taken to get initial  investment  through  annual  cash inflows

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A: The net present value for the given project can be calculated as:

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.