(Abandonment Option)Hit or Miss Sports Is Introducing a New Product

question 8

Essay

(Abandonment Option)Hit or Miss Sports is introducing a new product this year.If its see-at-night soccer balls are a hit,the firm expects to be able to sell 50,000 units a year at a price of $60 each.If the new product is a bust,only 30,000 units can be sold at a price of $55.The variable cost of each ball is $30,and fixed costs are zero.The cost of the manufacturing equipment is $6 million,and the project life is estimated at 10 years.The firm will use straight-line depreciation over the 10-year life of the project.The firm's tax rate is 35% and the discount rate is 12%.
a.If each outcome is equally likely,what is expected NPV? Will the firm accept the project?
b.Suppose now that the firm can abandon the project and sell off the manufacturing equipment for $5.4 million if demand for the balls turns out to be weak.The firm will make the decision to continue or abandon after the first year of sales.Does the option to abandon change the firm's decision to accept the project?

Understand and apply the principles in the nursing code of ethics including advocacy, responsibility, confidentiality, and accountability.

Evaluate the importance of patient autonomy in nursing care decisions.

Assess ethical dilemmas involving patient care and apply ethical principles such as nonmaleficence, beneficence, and justice to resolve them.

Analyze factors affecting quality of life from a nursing perspective.

---

Definitions:

Pelvic Examination

A physical examination of the female pelvic organs to assess health and diagnose diseases.

Thyroid

A gland in the neck that produces hormones regulating growth, metabolism, and energy.

Edema

A medical condition characterized by an excess of watery fluid collecting in the cavities or tissues of the body.

Palpable

Something that can be felt through touch, often used in a medical context to describe detectable masses or swellings.