QUESTION: 41

CORRECT TEXT
A project requires an initial investment of $50,000. It will generate positive cash flows for two years as follows.

The cost of capital is 12% per year.

What is the equivalent annual net present value of the project?

Give your answer to the nearest $10.

$8190, $8191

Answer(s): A

Reveal Solution Next Question

QUESTION: 42

An organization wants to increase the use value that customers place on one of its products - a laptop computer.

Which of the following actions, taken to increase the value to the customer, would increase the product's use value?

Select ALL that apply.

Launching a marketing campaign designed to build the company's brand.
Installing a touch screen to improve the computer's functionality.
Changing the color of the computer's case.
Adopting a premium pricing strategy for the computer.
Fitting advanced components to improve the computer's performance.

Answer(s): B,E

Reveal Solution Next Question

QUESTION: 43

Company D is about to launch an innovative and unique product which may face direct competition within three years. The company needs to achieve a rapid payback on all investments because it has limited access to external finance.

Which is the most appropriate pricing strategy for company D's new product, and for what reason?

Market skimming because it exploits areas of the market which are sensitive to price.
Penetration pricing because it can be used to rapidly build sales volume in mature markets.
Market skimming because it enables high prices to be charged to buyers who want the product as soon as possible.
Penetration pricing because it can be used to rapidly build sales volume in high growth markets.

Answer(s): C

Reveal Solution Next Question

QUESTION: 44

CORRECT TEXT
A company is investing $200,000 in a project which will generate a cash flow of $60,000 each year for five years starting immediately. The company's cost of capital is 7%.

The net present value of the investment to the nearest $100 is $

63200

Answer(s): A

Reveal Solution Next Question

Free P2 Exam Braindumps (page: 11)

QUESTION: 41

QUESTION: 42

QUESTION: 43

QUESTION: 44