There is a 30% chance that you are correct that your hypothesis that opening a new store will be profitable. The expected cost of opening a new store that would flop is $500,000 while the not opening the store when it would succeed has an expected cost of $700,000.

Assume that you are thinking about starting your own small business. You have made the following estimates regarding this opportunity: You can rent a location for your business at a cost of $36, 000 per year. The equipment costs incurred to start the business would total $250,000. The equipment would have a 5-year useful life and a salvage value of S 25,000. Your company's estimated sales per year would equal $350,000 and its variable cost of goods sold would be 30% of sales. Other operating costs would include $56, 000 per year in salaries, S4, 000 per year for insurance, $25, 000 per year for utilities, and a 3% sales commission. The payback period for this investment opportunity is closest to:   Multiple Choice 4.08 years, 2.20 years. 3.80 years. 3.08 years.

Chris LeBlanc estimates that if he does 4.5 hours of research using data that will cost $175.00​, there is a good chance that he can improve his expected return on a $10,000​, ​1-year investment from 6.2% to 9.2%. Chris feels that he must earn at least $30.00 per hour on the time he devotes to his research. a. Find the cost of​ Chris's research. b. By how much​ (in dollars) will​ Chris's return increase as a result of the​ research? c. On a strict economic​ basis, should Chris perform the proposed​ research?

Assume that you are thinking about starting your own small business. You have made the following estimates regarding this opportunity: • You can rent a location for your business at a cost of $36,000 per year. The equipment costs incurred to start the business would total $250,000. The equipment would have a 5-year useful life and a salvage value of $25,000 Your company's estimated sales per year would equal $350,000 and its variable cost of goods sold would be 30% of sales. • Other operating costs would include $58,000 per year in salaries, $4,000 per year for insurance, $25,000 per year for utilities, and a 3% sales commission The simple rate of return for this investment opportunity is closest to: Multiple Choice 22.0% 19.0% 26.6% 15.7%