You Are Evaluating a Project for Your Company

question 9

Multiple Choice

You are evaluating a project for your company. You estimate the sales price to be $500 per unit and sales volume to be 2000 units in year 1; 3000 units in year 2; and 1500 units in year 3. The project has a three-year life. Variable costs amount to $300 per unit and fixed costs are $200,000 per year. The project requires an initial investment of $325,000 in assets which will be depreciated straight-line to zero over the three-year project life. The actual market value of these assets at the end of year 3 is expected to be $50,000. NWC requirements at the beginning of each year will be approximately 25 percent of the projected sales during the coming year. The tax rate is 34 percent and the required return on the project is 12 percent. What is the operating cash flow for the project in year 2?

• A) $74,167
• B) $192,500
• C) $300,833
• D) $374,500

Explain the impact of licensing agreements on brand and product marketing.

Differentiate primary and secondary packaging and its implications for brand visibility and product protection.

Understand the concept of brand extension and its significance in marketing.

Identify the differences between national brands and private-label brands.

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Definitions:

Personality Inventory Test

A type of psychological test that assesses various aspects of a person's character or psychological makeup, often used in hiring processes.

Selection Decisions

The process of choosing individuals from a group of applicants based on criteria relevant to job performance.

Confidence

The feeling or belief in one's abilities or qualities, often leading to a sense of self-assurance.

Requirements

Conditions or capabilities needed by users to solve a problem or achieve an objective.