Which of the following statements is true in relation to the information presented in the table? The interest rate affected the present value of all of these options. Only large companies can produce profits in the short term. Projects that incur costs will always produce a profit. Short-term payoffs may not always be the best option. Campaign today (in thousands) Dollars realized Dollars realized one year from today (in thousands) Globatel -21 210 Wireless Yummy Tummy 135 Pudding NiCad 60 -24 Electric Cars Excelsis Hot Air Balloons -55 108 Dawn and Amelia work for an international advertising agency. They are presented with four possible product campaigns for the year, of which they must choose only one. The annual interest rate is 9%. They must choose the campaign which will be most profitable to the company overall. The chart indicates the costs and benefits for each of the projects. A negative value indicates costs are greater than benefits for that time period. Use the information in the chart to calculate the net present values, and answer the questions. What is the net present value of the Excelsis Hot Air Balloon campaign (in thousands)? EA thousand Using your net present value calculations, which of the four campaigns are Dawn and Amelia most likely to select? Excelsis Hot Air Balloons Yummy Tummy Pudding NiCad Electric Cars Globatel Wireless
Which of the following statements is true in relation to the information presented in the table? The interest rate affected the present value of all of these options. Only large companies can produce profits in the short term. Projects that incur costs will always produce a profit. Short-term payoffs may not always be the best option. Campaign today (in thousands) Dollars realized Dollars realized one year from today (in thousands) Globatel -21 210 Wireless Yummy Tummy 135 Pudding NiCad 60 -24 Electric Cars Excelsis Hot Air Balloons -55 108 Dawn and Amelia work for an international advertising agency. They are presented with four possible product campaigns for the year, of which they must choose only one. The annual interest rate is 9%. They must choose the campaign which will be most profitable to the company overall. The chart indicates the costs and benefits for each of the projects. A negative value indicates costs are greater than benefits for that time period. Use the information in the chart to calculate the net present values, and answer the questions. What is the net present value of the Excelsis Hot Air Balloon campaign (in thousands)? EA thousand Using your net present value calculations, which of the four campaigns are Dawn and Amelia most likely to select? Excelsis Hot Air Balloons Yummy Tummy Pudding NiCad Electric Cars Globatel Wireless
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Transcribed Image Text:Which of the following statements is true in relation
to the information presented in the table?
The interest rate affected the present value of all
of these options.
Only large companies can produce profits in the
short term.
Projects that incur costs will always produce
a profit.
Short-term payoffs may not always be the
best option.
Transcribed Image Text:Campaign
today (in
thousands)
Dollars realized
Dollars realized
one year from
today (in
thousands)
Globatel
-21
210
Wireless
Yummy
Tummy
135
Pudding
NiCad
60
-24
Electric Cars
Excelsis Hot
Air Balloons
-55
108
Dawn and Amelia work for an international advertising
agency. They are presented with four possible product
campaigns for the year, of which they must choose only one.
The annual interest rate is 9%. They must choose the
campaign which will be most profitable to the company
overall. The chart indicates the costs and benefits for each of
the projects. A negative value indicates costs are greater than
benefits for that time period. Use the information in the chart
to calculate the net present values, and answer the questions.
What is the net present value of the Excelsis Hot Air Balloon
campaign (in thousands)?
EA
thousand
Using your net present value calculations, which of
the four campaigns are Dawn and Amelia most
likely to select?
Excelsis Hot Air Balloons
Yummy Tummy Pudding
NiCad Electric Cars
Globatel Wireless
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Recommended textbooks for you
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education