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RainMan Inc

question 66

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RainMan Inc. is in the business of producing rain upon request. They must decide between two investment projects; a new airplane for seeding rain clouds or a new weather control machine built by Dr. Nutzbaum. The discount rate for the new airplane is 9%, while the discount rate for the weather machine is 39% (it happens to be higher risk) . Which investment should the company select and why? RainMan Inc. is in the business of producing rain upon request. They must decide between two investment projects; a new airplane for seeding rain clouds or a new weather control machine built by Dr. Nutzbaum. The discount rate for the new airplane is 9%, while the discount rate for the weather machine is 39% (it happens to be higher risk) . Which investment should the company select and why?   A)  Airplane because is has a higher NPV B)  Weather machine because is has a higher NPV C)  Airplane because is has a higher annuity D)  Weather machine because is has a higher annuity


Definitions:

Cameron Herold

An author and business coach known for his expertise in entrepreneurial growth and operational excellence.

Concept Statement

A written representation of your vision for your product or service.

Cash Flow Statement

A financial statement that provides aggregated data regarding all cash inflows a company receives from its ongoing operations and external investment sources, as well as all cash outflows that pay for business activities and investments during a given period.

Features

Attributes, characteristics, or aspects of a product or service that contribute to its appeal or functionality.

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