(Related to Checkpoint 13.1) (Calculating expected revenues) The owner of the Petreno Pharmaceutical Company is evaluating the expected annual sales for a new line of facial care products and estimates that there is a 63 percent chance that the product line will be extremely successful, in which case it will generate sales next year of 7.6 million. However, since the new product line has a unique appeal that will require substantial advertising by its manufacturer to gain consumer acceptance, there is a 37 percent chance that revenues for next year will be a modest 1.1 million. What is the expected level of revenues for the new product line? The expected total revenue for the new line of products is $ million. (Round to two decimal places.)
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- B&B has a new baby powder ready to market. If the firm goes directly to the market with the product, there is only a 55 percent chance of success. However, the firm can conduct customer segment research, which will take a year and cost $875,000. By going through research, B&B will be able to better target potential customers and will increase the probability of success to 70 percent. If successful, the baby powder will bring a present value profit (at time of initial selling) of $16.5 million. If unsuccessful, the present value payoff is $7.5 million. The appropriate discount rate is 13 percent. Calculate the NPV for the firm if it conducts customer segment research and if it goes to market immediately. (Do not round intermediate calculations and enter your answers in dollars, not millions of dollars, rounded to 2 decimal places, e.g., 1,234,567.89. Should the firm conduct customer segment research or go to the market immediately? multiple choice…C&D has a new baby powder ready to market. If the firm goes directly to the marketwith the product, there is only a 60 percent chance of success. However, the firm can conduct customer segment research, which will take a year and cost $550,000. By going through research, B&B will be able to better target potential customers and will increase the probability of success to 75 percent. If successful, the baby powder will bring a present value profit (at time of initial selling) of $26 million. If unsuccessful, the present value profit is only $4.2 million. Should the firm conduct customer segment research or go directly to market? The appropriate discount rate is 12 percent. answer on an excel fileGidget has a new widget to bring to market. If the firm goes directly to market with the product, there is a 60% chance of success. However, the firm can conduct customer segment research, which will take a year and cost $5,000,000. By going through research, the company can better target potential customers and increase the probability of success to 75%. If successful, the widget will bring a present value profit (at the time of initial selling) of $90 million. If unsuccessful, the present value profit is only $15 million. The appropriate discount rate is 10%. Calculate the NPV for conducting customer segment research. (Enter whole numbers, e.g. 5 million should be 5,000,000)
- Harrison Jones is a marketer of facial care products. It plans on introducing a new product line next year and is not quite certain whether its sales team can accomplish the sales objectives. It must determine how much dollar business it must do to at least break even. Its historical average annual sales has been $10,000,000 and its cost of sales has been $4,500,000. Its planned investment in the new business is $450,000. How much dollar business must Harrison Jones do in order to recoup its planned investment?Delicious Snacks, Inc. is considering adding a new line of candies to its current product line. The company already paid $300,000 for a marketing research study that provided evidence about the demand for this product at this time. The new line will require an additional investment of $70,000 in raw materials to produce the candies. The project’s life is 7 years and the firm estimates sales of 1,500,000 packages at a price of $1 per unit the first year; but this volume is expected to grow at 17% for the next two years, 12% for the following two years, and finally at 7% for the last two years of the project. The price per unit is expected to grow at the historical average rate of inflation of 3%. The variable costs will be 70% of sales and the fixed costs will be $500,000. The equipment required to produce the candies will cost $900,000, and will require an additional $30,000 to have it delivered and installed. This equipment has an expected useful life of 7 years and will be…Hyperion, Inc. currently sells its latest high-speed colour printer, the Hyper 500, for $371. It plans to lower the price to $318 next year. Its cost of goods sold for the Hyper 500 is $212 per unit, and this year's sales are expected to be 21,000 units. a. Suppose that, if Hyperion drops the price to $318 immediately, it can increase this year's sales by 27% to 26,670 units. What would be the incremental impact on this year's EBIT of such a price drop? b. Suppose that, for each printer sold, Hyperion expects additional sales of $78 per year on ink cartridges for the three years, and Hyperion has a gross profit margin of 61% on ink cartridges. What is the incremental impact on EBIT for the next three years of a price drop this year?
- The vice president of operations at Dintell Corporation, a majorsupplier of passenger-side automotive air bags, is considering a$50 million expansion at the firm’s Fort Worth, Texas, produc-tion complex. The most recent economic projections indicate a0.60 probability that the overall market will be $400 million per year over the next five years and a 0.40 probability that the mar-ket will be only $200 million per year during the same period.The marketing department estimates that Dintell has a 0.50probability of capturing 40 percent of the market and an equalprobability of obtaining only 30 percent of the market. The costof goods sold is estimated to be 70 percent of sales. For planningpurposes, the company currently uses a 12 percent discountrate, a 40 percent tax rate, and the MACRS depreciation sched-ule. The criteria for investment decisions at Dintell are (1) thenet expected present value must be greater than zero; (2) theremust be at least a 70 percent chance that the net present…Recently, Gardenia Philippines Reported an increase of 35% in bread sales in Quarter 2 of 2020. How has this possible given the pandemic situation we are experiencing? What do you think makes gardenia's brand successful among its rivals despite the pandemic? What unique characteristics have you observed in their operations? Can a well-planned and well-managed operations and supply chain help build a competitive advantage? Explain your answers comprehensively.Marcus Tube, a manufacturer of high-quality aluminum tubing, has maintained stable sales and profits over the past 10 years. Although the market for aluminum tubing has been expanding by 3% per year, Marcus has been unsuccessful in sharing this growth. To increase its sales, the firm is considering an aggressive marketing campaign that centers on regularly running ads in all relevant trade journals and exhibiting products at all major regional and national trade shows. The campaign is expected to require an annual tax-deductible expenditure of $152,000 over the next 5 years. Sales revenue, as shown in the income statement for 2020 Marcus Tube Income Statement for the Year Ended December 31, 2020 Sales revenue $19,400,000 Less: Cost of goods sold (78%) 15,132,000 Gross profits $4,268,000 Less: Operating expenses General and administrative expense (12%) $2,328,000 Depreciation expense 490,000 Total operating expense $2,818,000 Earnings before interest and taxes $1,450,000…
- A pharmaceutical company is considering the implementation of cutting - edge automation in its drug manufacturing process to enhance efficiency and reduce production costs. The upfront investment required for this automation technology is estimated at $3.2 million. The new system is projected to generate annual savings of $1, 500, 000 by optimizing labor and resource utilization. However, there will be an additional annual operating and maintenance cost of $300, 000. Moreover, the company expects an increase of $170, 000 in annual income taxes. The automation system is expected to have a service life of 10 years, with an estimated salvage value of 5200, 000. Given the company's MARR is 18%, calculate the net present worth of this investment.PLEASE SOLVE IN EXCEL :B&B has a new baby powder ready to market. If the firm goes directly to the market with the product, there is only a 60 percent chance of success. However, the firm can conduct customer segment research, which will take a year and cost $1.21 million. By going through research, the company will be able to better target potential customers and will increase the probability of success to 75 percent. If successful, the baby powder will bring a present value profit (at time of initial selling) of $19.1 million. If unsuccessful, the present value payoff is only $6.1 million. The appropriate discount rate is 14 percent. Calculate the NPV for the firm if it goes to market immediately and if it conducts customer segment research. (Do not round intermediate calculations and enter your answers in dollars, not millions of dollars, rounded to 2 decimal places, e.g., 1,234,567.89.) Should the firm conduct customer segment research or go to the market immediately? multiple…1. What is the company's current breakeven in units and in dollars? 2. If the company expects to sell 260 premium garage doors in the upcoming year, and it does not develop the software control system, what is its expected operating income from premium garage doors? 3. If the software control system were to be developed and implemented, what would be the company's new breakeven point in units and in dollars? 4. If the company expects to sell 260 premium garage doors in the upcoming year, and it develops the software control system, what is its expected operating income from premium garage doors? 5. If the company expects to sell 260 premium garage doors in the upcoming year, do you think the company should implement the software control system? Why or why not? What factors should the company consider? pop-up content ends PrintDone