Refer to the Data Provided in Table 11 -Refer to Table 11

question 99

Multiple Choice

Refer to the data provided in Table 11.1 below to answer the following question(s) .
Table 11.1 $$\begin{array}{l}\begin{array} { l c c } &\text { Total Investment }&\text {Expected Rate of Return }\\ { \text { Project } } & \text { (dollars) } & \text { (percentage) } \\\hline \text { New tablet computer for sales staff } & \$ 500,000 & 22 \\\text { Remodel for distribution center } & \$ 400,000 & 18 \\\text { On-site day care center } & \$ 200,000 & 10 \\\text { Employee fitness center } & \$ 100,000 & 8\end{array}\end{array}$$
-Refer to Table 11.1. If the interest rate is 20%, Nashbar Bicycle should

• A) fund only the purchase of new tablet computers for its sales staff.
• B) fund all of the projects except for the purchase of new tablet computers for its sales staff.
• C) fund all of the projects.
• D) not fund any of the projects.

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Definitions:

Market Efficiency

A concept in financial economics that suggests that asset prices fully reflect all available information, meaning investors cannot consistently achieve higher returns on a risk-adjusted basis.

Advertising

A form of marketing communication used to promote or sell a product, service, or idea to potential customers.

Celebrity Advertising

A marketing strategy that uses the fame of a celebrity to promote products or services.

Inferior Product Quality

Products that fail to meet acceptable standards or expectations in terms of performance, durability, or reliability.