Imagine that you are a financial manager for a medium-sized company. Describe how you would use capital budgeting techniques to determine whether a business investment is a good idea. Give an example of a business investment venture and how you would use capital budgeting to ensure it is a good investment.

Imagine that you are a financial manager for a medium-sized company. Describe how you would use capital budgeting techniques to determine whether a business investment is a good idea. Give an example of a business investment venture and how you would use capital budgeting to ensure it is a good investment.

Economics Today and Tomorrow, Student Edition

1st Edition

ISBN:9780078747663

Author:McGraw-Hill

Publisher:McGraw-Hill

Chapter10: Financing And Producing Goods

Section: Chapter Questions

Problem 10AA

See similar textbooks

Similar questions

Does owning a share of stock in a company makes you a major decision maker for that company?
If no funds are available for investment, what can the firm do?
What happens with the product that is out of stock? Explain in economic terms.
2. The company that you manage has already spent $5 million on developing a new product – a website that combines You Tube, Twitter, and Facebook – called You Twit Face. The development is not quite finished. It will cost an extra $3 million to finish development and complete the product. At a recent meeting, your salespeople report that the expected sales of your new product (if you finish) are $7 million total. If you do not finish developing the product you can sell the incomplete product to another company for $2 million. What is the MC of finishing the development? __________________ What is the MB of finishing the development? __________________ Should you finish the product? Why or why not? Use the idea of “thinking at the margin” to explain your answer.
What does an entrepreneur use to summarize his or her business strategy for a proposed new venture?
Janet spends $20,000 per year on painting supplies and storage space. She recently received two job offers from a famous marketing firm- one offer were for $100,000 per year, and the other was for $90,000. However, she turned both jobs down to continue a painting career. If Janet sells 25 paintings per year at a price of $8,000 each: a. What are her accounting profits? Show your steps leading to your answer b. What are her economic profits
Activity 2 Directions: Read the story carefully. Analyze the business. Then answer the questions at the end of the story. Anne and Cherry are friends since high school. Anne is good in baking and Cherry is good in selling. To increase their income, they decided to put up an online business of bakery products. They contributed 10,000 each to start the business and decided to split the profit equally as business partners. The friends agreed that Anne will be in charge of the production while Cherry will be in charge of the online site for taking marketing and promotion. Cherry started taking orders while Anne is busy on baking products. The business started to get big orders from their regular clients and other who visited their online site. After one year of operation, while Cherry continue with her regular work Anne as in-charge of the production, started getting sick and advised to rest. Now, Anne can no longer continue baking for their business. 1. What went wrong with the business?…
Break-Even Analysis Your buddy comes to you with a sure-fire way to make some quick money and help pay off your student loans. His idea is to sell T-shirts with the words “I get” on them. “You get it?” He says, “You see all those bumper stickers and T-shirts that say ‘got milk’ or ‘got surf.’ So this says, ‘I get.’ It’s funny! All we have to do is buy a used silk screen press for $7,200 and we are in business!” Assume there are no fixed costs and you depreciate the $7,200 in the first period. The tax rate is 21 percent. a. What is the accounting break-even point if each shirt costs $3.20 to make and you can sell them for $15 apiece? Now assume one year has passed and you have sold 5,000 shirts! You find out that the Dairy Farmers of America have copyrighted the “got milk” slogan and are requiring you to pay $20,000 to continue operations. You expect this craze will last for another three years and that your discount rate is 12 percent. b. What is the financial break-even point for your…
https://econeveryday.com/heinz-explores-producing-paper-ketchup-bottles/ Summarize, relate, and react to what you have read. Your response would be at least 300 words long. Make sure to include the title of the article, the source, and the date of publication. Focus on the main idea and explain how the article is related to the course material. Explain your reaction to the news. Include the original copy of the article or video.
Which of the following terms is associated with giving up the chance to earn a return on investment funds? a. Opportunity cost b. Cost of capital c. Sunk cost d. Past cost.
Please explain the importance of choosing good partners when starting a new business
What is a cost that changes with the change in volume of activity of an organization