Business, 16.03.2020 16:59 Jazminruiz0527

The Expresso Roast Corporation (ERC) is considering expanding its product lines by acquiring Mellow-Man Tea. The company’s founder is obscenely wealthy and will operate these lines for only one year before retiring and will therefore use only a one-year planning horizon. Mellow-Man Tea has a cost of $80,000 and is expected to produce benefits in one year of $65,000. While this line is not as immediately profitable as the other alternative, it is estimated that this line could be sold upon the founder’s retirement in one year for $20,000. The health benefits of tea make this a less risky investment and ERC’s CFO has recommended a risk-premium of 10%. All future cash benefits will occur at the end of the year. The rate of return on US T-Bills is 4%. What is the IRR for this investment? Just enter the number and sign of your answer. Give your answer in percents (do not use the percent sign).

Answers: 2

Show answers

Other questions on the subject: Business

Business, 22.06.2019 05:30, mem8163

U. s. internet advertising revenue grew at the rate of r(t) = 0.82t + 1.14 (0 ≤ t ≤ 4) billion dollars/year between 2002 (t = 0) and 2006 (t = 4). the advertising revenue in 2002 was $5.9 billion.† (a) find an expression f(t) giving the advertising revenue in year t.

Answers: 1

continue

Business, 22.06.2019 16:40, yovann

Consider two similar industries, portal crane manufacturing (pcm) and forklift manufacturing (flm). the pcm industry has exactly three incumbents with annual sales of $800 million, $200 million and $100 million, respectively. the flm industry has also exactly three incumbents, with annual sales of $500 million, $450 million and $400 million, respectively. which industry is more likely to experience a higher level of rivalry?

Answers: 3

continue

Business, 22.06.2019 16:50, tayveon122

Identify and describe a variety of performance rating scales that can be used in organizations including graphical scales, letter scales, and numeric scales.

Answers: 2

continue

Business, 22.06.2019 17:50, primmprincess312

Which of the following statements is true of unsought products? as compared to convenience products, unsought products are purchased more frequently. unsought products are consumer products and services that customers usually buy frequently, immediately, and with minimal comparison and buying effort. a life insurance policy is an example of an unsought product. unsought products have strong brand identification for which a significant group of buyers is willing to make a special purchase effort. unsought products are those products purchased for further processing or for use in conducting a business.

Answers: 2

continue

You know the right answer?

The Expresso Roast Corporation (ERC) is considering expanding its product lines by acquiring Mellow-...