The Oakley-Brown, a Frozen Food Processor, Is Considering Buying a Curly-Fry

question 29

Multiple Choice

The Oakley-Brown, a frozen food processor, is considering buying a curly-fry extruder with potato preparation attachments for $90,000. It expects to sell 2,500 cases the first year and 4,500 cases for four years after that while the craze lasts. Price per case will be $30. Cost of goods, selling and administration expenses equal $62,500 in the first year and $100,500 in the subsequent years. What price drop will bring NPV to near zero if the company's hurdle rate is 14%?

• A) $0.06
• B) $0.15
• C) $0.67
• D) $1.00
• E) $1.50

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Definitions:

Data Visualization

The representation of data or information in a graphical format, making it easier to see patterns, trends, and outliers.

Pictorial Format

A method of presenting information through images or visual representations instead of text.

Graphical Format

Data or information presented in a visual or graphic form, such as diagrams, charts, or maps, to facilitate understanding.

Data Collection

The systematic gathering of information from various sources for analysis.