The Nu-Tech Company Has a New Project Available to It

question 26

Essay

The Nu-Tech Company has a new project available to it at a cost of £6,000,000.The project that they can sell 13,000 personal organizers at £172 in net cash flow for each of the next five years.Nu-Tech's discount rate is 15%.What is the NPV of the investment?
The executives of Nu-Tech are concerned about the potential of future competition and a subsequent drop in sales and price.If after two year you can dispose of the asset for £1,000,000 at what price would it make sense to abandon the project?

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Definitions:

Goal-Means Gap

The disparity between culturally approved goals and the availability of legitimate means to achieve these goals, often cited in strain theory as a cause of deviance.

Ritualism

The adherence to or performance of rituals or ceremonial acts as part of a culture, religion, or group membership.

Status Frustration

A psychological condition resulting from an individual's inability to achieve his or her expected social status, leading to feelings of inadequacy and disappointment.

Delinquent Subcultures

Groups within society that engage in behavior against the societal norms and laws, often among youths.