Business, 05.05.2021 01:40 hannahpaige6347
Kelly Slater owns a parcel of land in Palm Springs and is considering two possible development options which both use his signature Kelly Slater Wave Pool technology.
Option A: Create a private surf club, in which case he would have to invest $10 million today (EOY 0). The club would then generate an annual free cash flow of $2 million in perpetuity starting EOY 1.
Option B: Create a surf resort and hotel open to the public, in which case he would have to invest $50 million today (EOY 0). The resort would then generate an annual free cash flow of $6.5 million in perpetuity starting EOY 1.
Assume Kelly's discount rate is 10% and that he can only invest in one of the two options. Kelly should:
a. Accept both options because they both have positive NPV
b. Choose Option A because it has a higher IRR
c. Reject both options because both have an IRR less than 10%
d. Choose Option B because it has a higher NPV
Answers: 3
Other questions on the subject: Business
Business, 22.06.2019 01:20, tsadface21
Suppose a stock had an initial price of $65 per share, paid a dividend of $1.45 per share during the year, and had an ending share price of $58. a, compute the percentage total return. (a negative answer should be indicated by a minus sign. do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e. g., 32.16.) b. what was the dividend yield and the capital gains yield? (a negative answer should be indicated by a minus sign. do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e. g., 32.16.)
Answers: 2
Business, 22.06.2019 20:30, Arealbot
Afirm wants to hire a project manager (pm) at a salary of $100,000. 30% of pms have high ability, and 70% of pms have low ability. high ability pms generate $120,000 in revenue and low ability pms generate $80,000 in revenue. in addition to differences in productivity, high and low ability pms have different outside offers. if a high ability pm is not hired by the firm, she can work for another company at a salary of $80,000. if the low ability pm is not hired by the firm, she can work for another company for $70,000. high ability pms are also able to get a project management professional (pmp) certification at a cost of $1,000. low ability pms are unable to get a pmp certification (they would fail the test). the firm is not able to observe a pm’s ability, but is able to observe and verify whether or not the pm has a pmp certificate.(a) draw the extensive form of the game. expert answer
Answers: 3
Business, 22.06.2019 21:20, fespinoza019
Rediger inc., a manufacturing corporation, has provided the following data for the month of june. the balance in the work in process inventory account was $28,000 at the beginning of the month and $20,000 at the end of the month. during the month, the corporation incurred direct materials cost of $56,200 and direct labor cost of $29,800. the actual manufacturing overhead cost incurred was $53,600. the manufacturing overhead cost applied to work in process was $52,200. the cost of goods manufactured for june was:
Answers: 2
Business, 22.06.2019 23:30, autumnsusan190ox9kn4
Decision alternatives should be identified before decision criteria are established. are limited to quantitative solutions are evaluated as a part of the problem definition stage. are best generated by brain-storming.
Answers: 1
You know the right answer?
Kelly Slater owns a parcel of land in Palm Springs and is considering two possible development optio...
Questions in other subjects:
Mathematics, 30.07.2019 23:30
History, 30.07.2019 23:30
